OpenLegislation

The Electricity and Gas (Smart Meters Licensable Activity) Order 2012

Draft. This instrument was laid in draft and may differ from the one made. Look for the made version under its title.

Draft 2012, ISBN 9780111527412

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

This draft Order supersedes the draft Electricity and Gas (Smart Meters Licensable Activity) Order 2012 laid before Parliament on 4th July 2012 and is being issued free of charge to all known recipients of that draft Order.

Draft Order laid before Parliament under section 56FB(3) of the Electricity Act 1989 and section 41HB(3) of the Gas Act 1986, for approval by resolution of each House of Parliament.

Electricity

Gas

Made 2012

Coming into force 2012

This Order is made in exercise of the powers conferred by section 56FA(1), (5) and (6) and section 60 of the Electricity Act 1989f1 and section 41HA(1), (5) and (6) and section 47 of the Gas Act 1986f2.

The Secretary of State has in accordance with section 56FB(1) of the Electricity Act 1989 and section 41HB(1) of the Gas Act 1986 consulted—

(a)

the Gas and Electricity Markets Authority; and

(b)

such other persons as the Secretary of State thinks appropriate.

A draft of this instrument has been approved by a resolution of each House of Parliament pursuant to section 56FB(3) of the Electricity Act 1989 and section 41HB(3) of the Gas Act 1986.

Accordingly, the Secretary of State makes the following Order.

Annotations to the whole text

Footnotes

f1

1989 c. 29. Sections 56FA and 56FB were inserted by section 91 of and Schedule 4 to the Energy Act 2008 (c. 32). Section 56FB was amended by section 73 of the Energy Act 2011 (c. 16). Section 60 was amended by section 3(2) of the Utilities Act 2000 (c. 27).

f2

1986 c. 44. Sections 41HA and 41HB were inserted by section 91 of and Schedule 4 to the Energy Act 2008 (c. 32). Relevant amendments to section 47 were made by section 3(2) of the Utilities Act 2000 (c. 27) and section 10(1) of the Gas Act 1995 (c. 45). Section 41HB was amended by section 73 of the Energy Act 2011 (c. 16).

Contents

  1. Part 1: General
  2. 1Citation and commencement
  3. Part 2: Amendments to the Electricity Act 1989
  4. 2Amendments to the Electricity Act 1989
  5. 3Amendment to section 3A (the principal objective and general duties of the Secretary of State and the Authority)
  6. 4Amendment to section 4 (prohibition on unlicensed supply etc)
  7. 5Amendment to section 5 (exemptions from prohibition)
  8. 6Amendment to section 6 (licences authorising supply, etc)
  9. 7Amendment to section 6A (procedure for licence applications)
  10. 8Amendment to section 7 (conditions of licences: general)
  11. 9Amendment to section 7A (transfer of licences)
  12. 10Amendment to section 47 (general functions)
  13. 11Amendment to section 56A (power to alter activities requiring licence)
  14. 12Amendment to section 58 (directions restricting the use of certain information)
  15. 13Amendment to section 64 (interpretation etc of Part 1)
  16. 14Amendment to section 96 (directions for preserving security)
  17. 15Amendment to section 98 (provision of statistical information)
  18. 16Amendment to Schedule 6A (provisions imposing obligations enforceable as relevant requirements)
  19. Part 3: Amendments to the Gas Act 1986
  20. 17Amendments to the Gas Act 1986
  21. 18Amendment to 4AA (the principal objective and general duties of the Secretary of State and the Authority)
  22. 19Amendment to section 5 (prohibition on unlicensed activities)
  23. 20Amendment to section 6A (exemptions from prohibition)
  24. 21Insertion of section 7AB (licensing of a person providing a smart meter communication service)
  25. 22Amendment to section 7B (licences: general)
  26. 23Amendment to section 8AA (transfer of licences)
  27. 24Amendment to section 23B (appeal to the Competition Commission)
  28. 25Amendment to section 36 (keeping of register)
  29. 26Amendment to section 41C (power to alter activities requiring licence)
  30. 27Amendment to section 48 (interpretation of Part 1 and savings)
  31. 28Amendment to Schedule 4B (provisions imposing obligations enforceable as relevant requirements)
  32. Part 4: Amendments to other primary legislation
  33. 29Amendment to the Insolvency Act 1986
  34. 30Amendments to the Utilities Act 2000
  35. 31Amendments to the Enterprise Act 2002
  36. 32Amendment to the Consumers, Estate Agents and Redress Act 2007
  37. 33Amendment to the Energy Act 2008
  38. Part 5: Amendments to secondary legislation
  39. 34Amendment to the Public Interest Disclosure (Prescribed Persons) Order 1999
  40. 35Amendment to the Electricity Safety, Quality and Continuity Regulations 2002
  41. Part 6: Amendments to standard conditions of electricity licences
  42. 36Amendments to the standard conditions of electricity distribution licences
  43. 37Amendments to the standard conditions of electricity supply licences
  44. Part 7: Transitional exemptions
  45. 38Smart meter communications service exemptions
  46. Signature
  47. Explanatory note

1Citation and commencement

This Order may be cited as the Electricity and Gas (Smart Meters Licensable Activity) Order 2012, and comes into force on the day after the day on which it is made.

2Amendments to the Electricity Act 1989

The Electricity Act 1989f1 is amended in accordance with articles 3 to 16.

3Amendment to section 3A (the principal objective and general duties of the Secretary of State and the Authority)

In section 3A(5)f1—

(a)

in paragraph (a)—

(i)

after “transmission of electricity”, for “or”, substitute “,”; and

(ii)

after “electricity interconnectors”, insert “or to provide a smart meter communication service”; and

(b)

after each instance of “supply of electricity”, insert “or the provision of a smart meter communication service”.

4Amendment to section 4 (prohibition on unlicensed supply etc)

(1)

Section 4f1 (prohibition on unlicensed supply etc) is amended as follows.

(2)

In subsection (1)—

(a)

omit the word “or” after paragraph (c); and

(b)

after paragraph (d), insert—

“; or

(e)

provides a smart meter communication service,”.

(3)

After subsection (3F), insert—

“(3G)

A reference in this Part to providing a smart meter communication service is a reference to making arrangements with each domestic supplier to provide a service, for such suppliers, of communicating relevant information to and from smart meters through which electricity is supplied to domestic premises.”.

(4)

After subsection (5), insert—

“(6)

In this section—

  • “domestic supplier” means an electricity supplier—

    1. (a)

      who is authorised, in accordance with the conditions of a licence, to supply electricity to domestic premises; and

    2. (b)

      who supplies electricity to domestic premises in accordance with that licence;

  • “external electronic communications network” means a network which—

    1. (a)

      is an electronic communications network, within the meaning of section 32 of the Communications Act 2003f2; and

    2. (b)

      does not form part of a smart meter;

  • “relevant information” means information relating to the supply of electricity; and

  • “smart meter” means—

    1. (a)

      an electricity meter which can send and receive information using an external electronic communications network; or

    2. (b)

      an electricity meter and a device which is associated with or ancillary to that meter and which enables information to be sent to and received by the meter using an external electronic communications network.”.

5Amendment to section 5 (exemptions from prohibition)

In section 5(1)f1, for “(c) or (d)”, substitute “(c), (d) or (e)”.

6Amendment to section 6 (licences authorising supply, etc)

(1)

Section 6f1 is amended in accordance with paragraphs (2) to (4).

(2)

In subsection (1)—

(a)

omit the word “or” after paragraph (d); and

(b)

after paragraph (e), insert—

“; or

(f)

subject to subsection (1C), a licence authorising a person to provide a smart meter communication service (“a smart meter communication licence”).”.

(3)

After subsection (1), insert—

“(1A)

Subject to subsection (1B), the Secretary of State may grant a smart meter communication licence.

(1B)

The Secretary of State may not grant a smart meter communication licence after 1 November 2018.

(1C)

The first smart meter communication licence may only be granted by the Secretary of State.”.

(4)

After subsection (2A), insert—

“(2B)

A person may not be granted a smart meter communication licence unless the same person is at the same time granted a licence under section 7AB of the Gas Act 1986f2.”.

(5)

A reference in any enactment to a licence under section 6(1) of the Electricity Act 1989 or a licence under section 6(1)(f) of that Act, shall be deemed to include any licence under section 6(1A) of that Act.

7Amendment to section 6A (procedure for licence applications)

(1)

Section 6A(1)f1 is amended as follows.

(2)

In paragraph (a), after “licence” insert “(but this is subject to subsection (1A))”.

(3)

After subsection (1) insert—

“(1A)

At any time when regulations made under section 56FCf2 are in force, this section does not apply to an application for a smart meter communication licence.”.

8Amendment to section 7 (conditions of licences: general)

(1)

Section 7f1 is amended as follows.

(2)

In subsection (1)(a), for the “Authority”, substitute “grantor”.

(3)

After subsection (3A), insert—

“(3B)

Without prejudice to the generality of paragraph (a) of subsection (1), conditions which are described in subsection (3C) may be included in a smart meter communication licence by virtue of that paragraph, in respect of circumstances where a person holds such a licence (the “licence holder”), and another person has applied or is considering whether to apply for a smart meter communication licence (“the applicant”).

(3C)

The conditions in this subsection are conditions which require the licence holder to comply with a direction given by the Secretary of State or the Authority requiring the licence holder to provide to the applicant—

(a)

information in relation to the activities authorised by the licence; or

(b)

such other assistance as may be reasonably required by the applicant, including access to any facilities or equipment being used in connection with the activities authorised by the licence, in order that the applicant can—

(i)

determine whether to apply for a licence; or

(ii)

take part in a competition for a licence.

(3D)

Subject to subsection (3F) and without prejudice to the generality of paragraph (a) of subsection (1), conditions which are described in subsection (3E) may be included in a smart meter communication licence by virtue of that paragraph, in respect of circumstances where such a licence held by a person (the “first licensee”) will cease to have effect, and another such licence is to be granted or has been granted to a different person (the “second licensee”).

(3E)

The conditions in this subsection are conditions which require compliance with a direction given by the Secretary of State or the Authority requiring—

(a)

the transfer of property, rights or liabilities from the first licensee to the second licensee;

(b)

the creation of rights in relation to property, rights or liabilities in favour of the second licensee;

(c)

the creation of other rights and liabilities as between the first and second licensee;

(d)

the first or second licensee to enter into a written agreement with each other, or the first licensee to execute an instrument of another kind in favour of the second licensee;

(e)

the first or second licensee to pay compensation to the other, or to any third party who is affected by any of the matters referred to in paragraphs (a) to (d).

(3F)

Conditions included in a licence by virtue of subsection (3D) must provide that the licensee does not have a duty to comply with a direction of the kind referred to in subsection (3E) unless, in relation to that direction, the following conditions have been satisfied prior to it being given—

(a)

the Secretary of State or the Authority (as appropriate) has given written notice to the first licensee, the second licensee and any other person who would potentially be affected by the direction, including a copy of the proposed direction and inviting them to submit written representations, giving a minimum period of 21 days in which those representations can be made; and

(b)

after the end of the period set out in the notice under paragraph (a), the Secretary of State or the Authority (as appropriate) has considered those representations and determined that—

(i)

it is appropriate in all the circumstances that the proposed direction is given; and

(ii)

the arrangements of a type referred to in paragraphs (a) to (d) of subsection (3E) in the direction are necessary or expedient for the operational purposes of the second licensee, or are agreed by the first licensee and the second licensee to be necessary or expedient for those purposes.

(3G)

For the purposes of subsection (3F), the operational purposes of the second licensee are the purposes of performing any functions which the second licensee has, or will have—

(a)

under or by virtue of the smart meter communication licence which has been, or is to be, granted; or

(b)

under or by virtue of any enactment, in the second licensee’s capacity as holder of that licence.”.

9Amendment to section 7A (transfer of licences)

(1)

Section 7Af1 is amended as follows.

(2)

After subsection (10), insert—

“(10A)

Subject to subsection (10C), the Authority shall, following consideration of any representations or objections under subsection (9), give the Secretary of State not less than 28 days’ notice of any proposal to give consent to the transfer of the whole or any part of a smart meter communication licence.

(10B)

If, before the expiry of the time specified in a notice under subsection (10A), the Secretary of State directs the Authority not to give consent, the Authority shall comply with that direction.

(10C)

Where the Secretary of State does not give a direction under subsection (10B), the Authority may give consent to the transfer of the licence after—

(a)

the expiry of the time specified in the notice under subsection (10A); or

(b)

if earlier than the time in paragraph (a), the time at which the Secretary of State informs the Authority that no direction will be given under subsection (10B) in relation to the notice.

(10D)

Subsections (10A) to (10C) do not apply after 1 November 2018.”.

(3)

After subsection (11), insert—

“(11A)

A smart meter communication licence may not be transferred to a person unless a licence granted under section 7AB of the Gas Act 1986 is also transferred to the same person at the same time.”.

10Amendment to section 47 (general functions)

In section 47(1)f1 after “by such heat” insert “, and to the provision of smart meter communication services”.

11Amendment to section 56A (power to alter activities requiring licence)

In section 56A(4)f1, after “supply of electricity”, insert “, or with providing a smart meter communication service”.

12Amendment to section 58 (directions restricting the use of certain information)

In section 58(2)f1, after “electricity interconnectors”, insert “or to provide a smart meter communication service”.

13Amendment to section 64 (interpretation etc of Part 1)

In section 64(1)f1, insert in the relevant position—

  • ““providing a smart meter communication service” has the meaning given in section 4(3G) above, and cognate expressions shall be construed accordingly;”.

14Amendment to section 96 (directions for preserving security)

(1)

Section 96 is amended as follows.

(2)

In subsection (1)(a), after “supply of electricity”, insert “or the provision of a smart meter communication service”.

(3)

In subsection (6), after “supply electricity”, insert “or the provision of a smart meter communication service”.

15Amendment to section 98 (provision of statistical information)

In section 98(1)f1—

(a)

after “the use of electricity interconnectors”, insert “or the provision of a smart meter communication service”; and

(b)

after “operation of electricity interconnectors”, insert “or to provide a smart meter communication service”.

16Amendment to Schedule 6A (provisions imposing obligations enforceable as relevant requirements)

(1)

Schedule 6Af1 is amended as follows.

(2)

In paragraph 1, after “licence holders”, insert “(except the holder of a smart meter communication licence)”.

(3)

Insert after paragraph 9—

“Smart meter communication licence holders

9A.

The following are relevant provisions in relation to the holder of a smart meter communication licence—

(a)

section 42Cf2; and

(b)

section 25(5) of the Consumers, Estate Agents and Redress Act 2007f3 (directions to comply with requirements under section 24 of that Act).”.

17Amendments to the Gas Act 1986

The Gas Act 1986f1 is amended in accordance with articles 18 to 28.

18Amendment to 4AA (the principal objective and general duties of the Secretary of State and the Authority)

(1)

Section 4AAf1 is amended as follows.

(2)

In subsection (5)—

(a)

in paragraph (b), after “conveyed through pipes”, insert “or the provision of a smart meter communication service”; and

(b)

in the last line, after “gas through pipes”, insert “or the provision of a smart meter communication service”.

(3)

In subsection (8), for “or 7A”, substitute “, 7A or 7AB”.

19Amendment to section 5 (prohibition on unlicensed activities)

(1)

Section 5f1 (prohibition on unlicensed activities) is amended as follows.

(2)

In subsection (1)—

(a)

omit the word “or” after paragraph (b); and

(b)

after paragraph (c), insert—

“; or

(d)

provides a smart meter communication service,”.

(3)

After subsection (10), insert—

“(11)

A reference in this Part to providing a smart meter communication service is a reference to making arrangements with each domestic supplier to provide a service, for such suppliers, of communicating relevant information to and from smart meters through which gas is supplied to domestic premises.

(12)

In this section—

  • “domestic supplier” means a gas supplier—

    1. (a)

      who is authorised, in accordance with the conditions of a licence, to supply gas to domestic premises; and

    2. (b)

      who supplies gas to domestic premises in accordance with that licence;

  • “external electronic communications network” means a network which—

    1. (a)

      is an electronic communications network, within the meaning of section 32 of the Communications Act 2003f2; and

    2. (b)

      does not form part of a smart meter;

  • “relevant information” means information relating to the supply of gas; and

  • “smart meter” means—

    1. (a)

      a gas meter which can send and receive information using an external electronic communications network; or

    2. (b)

      a gas meter and a device which is associated with or ancillary to that meter and which enables information to be sent to and received by the meter using an external electronic communications network.”.

20Amendment to section 6A (exemptions from prohibition)

In section 6A(1)f1, for “or (c)”, substitute “, (c) or (d)”.

21Insertion of section 7AB (licensing of a person providing a smart meter communication service)

After section 7Af1, insert—

“Licensing of a person providing a smart meter communication service

7AB.
(1)

Subject to subsections (4) and (5), the Authority may grant a licence authorising a person to provide a smart meter communication service (“a smart meter communication licence”).

(2)

Subject to subsections (3) and (5), the Secretary of State may grant a smart meter communication licence.

(3)

The Secretary of State may not grant a smart meter communication licence after 1 November 2018.

(4)

The first smart meter communication licence may only be granted by the Secretary of State.

(5)

A person may not be granted a smart meter communication licence unless the same person is at the same time granted a licence under section 6(1)(f) of the Electricity Act 1989f2.”.

22Amendment to section 7B (licences: general)

(1)

Section 7Bf1 is amended as follows.

(2)

After subsection (2A), insert—

“(2B)

At any time when regulations made under section 41HCf2 are in force, subsections (1) to (2A) do not apply to an application for a smart meter communication licence.”.

(3)

In subsection (4)(a), for “Authority”, insert “grantor”.

(4)

In subsection (5)(b)(ii), after “7A”, insert “or 7AB”.

(5)

After subsection (5), insert—

“(5A)

Without prejudice to the generality of paragraph (a) of subsection (4), conditions which are described in subsection (5B) may be included in a smart meter communication licence by virtue of that paragraph, in respect of circumstances where a person holds such a licence (the “licence holder”), and another person has applied or is considering whether to apply for a smart meter communication licence (“the applicant”).

(5B)

The conditions in this subsection are conditions which require the licence holder to comply with a direction given by the Secretary of State or the Authority requiring the licence holder to provide to the applicant—

(a)

information in relation to the activities authorised by the licence; or

(b)

such other assistance as may be reasonably required by the applicant, including access to any facilities or equipment being used in connection with the activities authorised by the licence, in order that the applicant can—

(i)

determine whether to apply for a licence; or

(ii)

take part in a competition for a licence.

(5C)

Subject to subsection (5E) and without prejudice to the generality of paragraph (a) of subsection (4), conditions which are described in subsection (5D) may be included in a smart meter communication licence by virtue of that paragraph, in respect of circumstances where such a licence held by a person (the “first licensee”) will cease to have effect, and another such licence is to be granted or has been granted to a different person (the “second licensee”).

(5D)

The conditions in this subsection are conditions which require compliance with a direction given by the Secretary of State or the Authority requiring—

(a)

the transfer of property, rights or liabilities from the first licensee to the second licensee;

(b)

the creation of rights in relation to property, rights or liabilities in favour of the second licensee;

(c)

the creation of other rights and liabilities as between the first and second licensee;

(d)

the first or second licensee to enter into a written agreement with each other, or the first licensee to execute an instrument of another kind in favour of the second licensee;

(e)

the first or second licensee to pay compensation to the other, or to any third party who is affected by any of the matters referred to in paragraphs (a) to (d).

(5E)

Conditions included in a licence by virtue of subsection (5C) must provide that the licensee does not have a duty to comply with a direction of the kind referred to in subsection (5D) unless, in relation to that direction, the following conditions have been satisfied prior to it being given—

(a)

the Secretary of State or the Authority (as appropriate) has given written notice to the first licensee, the second licensee and any other person who would potentially be affected by the direction, including a copy of the proposed direction and inviting them to submit written representations, giving a minimum period of 21 days in which those representations can be made; and

(b)

after the end of the period set out in the notice under paragraph (a), the Secretary of State or the Authority (as appropriate) has considered those representations and determined that—

(i)

it is appropriate in all the circumstances that the proposed direction is given; and

(ii)

the arrangements of a type referred to in paragraphs (a) to (d) of subsection (5D) in the direction are necessary or expedient for the operational purposes of the second licensee, or are agreed by the first licensee and the second licensee to be necessary or expedient for those purposes.

(5F)

For the purposes of subsection (5E), the operational purposes of the second licensee are the purposes of performing any functions which the second licensee has, or will have—

(a)

under or by virtue of the smart meter communication licence which has been, or is to be, granted; or

(b)

under or by virtue of any enactment, in the second licensee’s capacity as holder of that licence.”.

23Amendment to section 8AA (transfer of licences)

(1)

Section 8AAf1 is amended as follows.

(2)

After subsection (10), insert—

“(10A)

Subject to subsection (10C), the Authority shall, following consideration of any representations or objections under subsection (9), give the Secretary of State not less than 28 days’ notice of any proposal to give consent to the transfer of the whole or any part of a smart meter communication licence.

(10B)

If, before the expiry of the time specified in a notice under subsection (10A), the Secretary of State directs the Authority not to give consent, the Authority shall comply with that direction.

(10C)

Where the Secretary of State does not give a direction under subsection (10B), the Authority may give consent to the transfer of the licence after—

(a)

the expiry of the time specified in the notice under subsection (10A); or

(b)

if earlier than the time in paragraph (a), the time at which the Secretary of State informs the Authority that no direction will be given under subsection (10B) in relation to the notice.

(10D)

Subsections (10A) to (10C) do not apply after 1 November 2018.”.

(3)

After paragraph (11), insert—

“(11A)

A smart meter communication licence may not be transferred to a person unless a licence granted under section 6(1)(f) of the Electricity Act 1989 is also transferred to the same person at the same time.”.

24Amendment to section 23B (appeal to the Competition Commission)

In section 23B(2)(b)f1 for “or 7A(1) or (2)”, substitute “, 7A(1) or (2) or 7AB”.

25Amendment to section 36 (keeping of register)

In section 36(1) and (2)(d)f1, for “or 7A”, substitute “, 7A or 7AB”.

26Amendment to section 41C (power to alter activities requiring licence)

In section 41C(4)f1—

(a)

omit the word “or” after paragraph (b); and

(b)

after paragraph (c), insert—

“; or

(d)

the provision of a smart meter communication service.”.

27Amendment to section 48 (interpretation of Part 1 and savings)

In section 48(1)f1—

(a)

in the definition of “licence”, for “or 7A”, substitute “, 7A or 7AB”; and

(b)

insert in the relevant position—

  • ““providing a smart meter communication service” has the meaning given in section 5(11) above, and cognate expressions shall be construed accordingly;”; and

  • ““smart meter communication licence” has the meaning given to that term in section 7AB(1);”.

28Amendment to Schedule 4B (provisions imposing obligations enforceable as relevant requirements)

(1)

Schedule 4Bf1 is amended as follows.

(2)

In paragraph 1, after “all licence holders”, insert “(except the holder of a smart meter communication licence)”.

(3)

After paragraph 9, insert—

“Smart meter communication licence holders

9A.

The following are relevant provisions in relation to the holder of a smart meter communication licence—

(a)

section 33Ff2; and

(b)

section 25(5) of the Consumers, Estate Agents and Redress Act 2007f3 (directions to comply with requirements under section 24 of that Act).”

29Amendment to the Insolvency Act 1986

In paragraph 10(1)(b) of Schedule 2A of the Insolvency Act 1986f1 (interpretation of regulated business for the purposes of section 72D of that Act), for “or 7A”, substitute “, 7A or 7B”.

30Amendments to the Utilities Act 2000

(1)

The Utilities Act 2000f1 is amended as follows.

(2)

In section 5A(2)(b) (duty of authority to carry out impact assessment), after “supply of electricity”, insert “or in the provision of smart meter communication services (in respect of electricity meters or gas meters)”.

(3)

In section 106(1) (interpretation), in the definition of “gas licence”, for “or 7A”, insert “, 7A or 7AB”.

31Amendments to the Enterprise Act 2002

In section 168 of the Enterprise Act 2002f1 (regulated markets), in subsections (3)(c), (4)(c) and (6), for “or 7A”, substitute “, 7A or 7AB”.

32Amendment to the Consumers, Estate Agents and Redress Act 2007

In section 25 of the Consumers, Estate Agents and Redress Act 2007f1 (enforcement by a regulator of notices under section 24 of that Act), in the table at the end of subsection (3), for “or 7A”, substitute “, 7A or 7AB”.

33Amendment to the Energy Act 2008

(1)

Section 88 of the Energy Act 2008f1 (power to amend licence conditions etc: smart meters) is amended as follows.

(2)

In subsection (1)—

(a)

after paragraph (d), insert—

“(da)

a condition of a particular licence under section 6(1)(f) of the Electricity Act 1989, or under section 7AB of the Gas Act 1986 (smart meter communication licences);”; and

(b)

in paragraph (e), for “or 7A”, substitute “, 7A or 7AB”.

(3)

In subsection (6)—

(a)

in paragraph (b), for “or 7A”, substitute “, 7A or 7AB”;

(b)

in paragraph (c), for “or (d)”, substitute “, (d) or (f)”.

34Amendment to the Public Interest Disclosure (Prescribed Persons) Order 1999

In the Schedule to the Public Interest Disclosure (Prescribed Persons) Order 1999f1, in the second column in the entries relating to the Gas and Electricity Markets Authority—

(a)

after “(as defined in section 4(3E) of the Electricity Act 1989)”, insert “or providing a smart meter communication service (as defined in section 4(3G) of that Actf2)”; and

(b)

after “(as defined in section 5(8) of the Gas Act 1986)”, insert “or providing a smart meter communication service (as defined in section 5(11) of that Actf3)”.

35Amendment to the Electricity Safety, Quality and Continuity Regulations 2002

(1)

The Electricity Safety, Quality and Continuity Regulations 2002f1 are amended as follows.

(2)

In regulation 1(5) (interpretation), insert into the relevant place—

  • ““smart meter communication provider” means a person who holds a licence under section 6(1)(f) of the Electricity Act 1989;”.

(3)

In regulation 4 (duty of co-operation) for “and meter operators”, substitute “, meter operators and smart meter communication providers”.

36Amendments to the standard conditions of electricity distribution licences

(1)

The standard conditions incorporated by virtue of section 8Af1 of the Electricity Act 1989 in licences under section 6(1)(c) of that Act are amended in accordance with subsection (2).

(2)

In condition 1.3 (definitions for standard conditions) in the definition of “Authorised Electricity Operator”, for “or participate in the operation of an Interconnector”, substitute “, participate in the operation of an Interconnector or provide a smart meter communication service”.

37Amendments to the standard conditions of electricity supply licences

(1)

The standard conditions incorporated by virtue of section 8A of the Electricity Act 1989 in licences under section 6(1)(d) of that Act are amended in accordance with subsection (2).

(2)

In condition 1.3 (definitions for standard conditions) in the definition of “Authorised Electricity Operator”, for “or participate in the operation of an Interconnector”, substitute “, participate in the operation of an Interconnector or provide a smart meter communication service”.

38Smart meter communications service exemptions

(1)

This article applies for a period of 36 months beginning on the date on which this Order comes into force.

(2)

Paragraph (3) applies to a person who is not the holder of a licence under section 6(1)(f) of the Electricity Act 1989f1.

(3)

Exemption is granted from section 4(1)(e) of the Electricity Act 1989f2 to a person to whom this paragraph applies.

(4)

Paragraph (5) applies to a person who is not the holder of a licence under section 7AB(1)f3 of the Gas Act 1986.

(5)

Exemption is granted from section 5(1)(d)f4 of the Gas Act 1986 to a person to whom this paragraph applies.

Signature

Name

Parliamentary Under Secretary of State

Department of Energy and Climate Change

Date

Explanatory note

(This note is not part of the Order)

This Order amends the Electricity Act 1989 (“the 1989 Act”) and the Gas Act 1986 (“the 1986 Act”) to provide for new licensable activities relating to the provision of communication services with respect to smart meters. The Order also makes consequential amendments to those Acts and to other legislation, as well as making transitional provision.

Articles 2 to 16 provide for amendments to the 1989 Act.

Article 3 amends section 3A to provide that when the Secretary of State and the Gas and Electricity Authority (“the Authority”) carry out their respective functions under the Act, they do so in the manner best calculated to promote efficiency and economy on the part of persons authorised by to provide a service of communicating with smart meters for each licensed supplier of electricity to domestic premises and that they consider the environmental and public safety implications that relate to the provision of such a service.

Article 4 amends section 4 to make it a criminal offence to, without a licence, arrange to provide a service of communicating with smart meters on behalf of each licensed supplier of electricity to domestic premises (excluding suppliers who have a licence but do not actually supply electricity).

Article 5 amends section 5 so that the Secretary of State is able to grant exemptions from the requirement for a licence inserted into the Act by article 4.

Article 6 amends section 6 to enable the Authority or the Secretary of State to issue licences authorising persons to undertake the new licensable activity inserted into the Act by article 4. Provision is made to ensure that such a licence may only be granted to a person who is also at the same time granted an equivalent licence under section 7AB of the 1986 Act (inserted by article 21 of this Order).

Article 7 amends section 6A so that the provisions in that section relating to the application process for licences under the 1989 Act apply to the new class of licence, but only where a competitive licence award process for the licences of the new class is not provided for in regulations made under the powers in section 56FC of the 1989 Act.

Article 8 amends section 7 to enable particular conditions to be included in the new class of licence which provide for arrangements that may be necessary to facilitate a transition between successive holders of such licences.

Article 9 amends section 7A to provide for a right for the Secretary of State to direct the Authority not to consent to the transfer of a licence of the new class to a particular person. This right applies until 1 November 2018.

Article 10 amends section 47 to provide that the Authority has duties to keep under review and to collect information on the undertaking of the new licensable activity, in addition to the existing equivalent duties in respect of the existing licensable activities.

Article 11 amends section 56A to provide that activities connected with the new licensable activity can be become new licensable activities in accordance with the existing processes in that section.

Article 12 amends section 58 to extend an existing direction power which restricts the use by transmission licence holders of information they have gained from other licence holders, so that information gained from holders of the new class of licence is captured.

Article 13 amends section 64 to add new defined terms to the 1989 Act.

Article 14 amends section 96 to provide that directions that can be made under that section in respect of the security of buildings used in the energy system, include those buildings used in connection with undertaking the new licensable activity.

Article 15 amends section 98 to extend the provisions in that section allowing the Secretary of State to serve notices on licence holders requiring them to provide statistical information to holders of the new class of licence so that information can be sought in respect of the new licensable activity.

Article 16 amends Schedule 6A, which sets out the provisions in legislation which are treated as relevant requirements which renders them capable of enforcement under the 1989 Act by the Authority. The amendment adds relevant requirements with respect to the new class of licence.

Articles 17 to 28 provide for amendments to the 1986 Act.

Article 18 amends section 4AA. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 3.

Article 19 amends section 5. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 4.

Article 20 amends section 6A. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 5.

Article 21 inserts a new section 7AB, which authorises the Authority or the Secretary of State to issue licences enabling persons to undertake the new licensable activity inserted into the Act by article 19.

Article 22 amends section 7B. The amendments have an equivalent effect to the amendments made to the 1989 Act by articles 7 and 8.

Article 23 amends section 8AA. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 9.

Article 24 amends section 23B to provide that a holder of the new class of licence in the new section 7AB inserted by article 21 is able to bring appeals against licence modifications in the same way as the holders of other licences under the Act.

Article 25 amends section 36, to provide that the Authority’s register includes details of licences and exemptions granted in respect of the new activity inserted by article 19.

Article 26 amends section 41C. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 11.

Article 27 amends section 48. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 13.

Article 28 amends Schedule 4B. The amendments have an equivalent effect to the amendments made to the 1989 Act by article 16.

Articles 29 to 32 make consequential amendments to the Insolvency Act 1986, the Utilities Act 2000 and the Enterprise Act 2002 to ensure that the new class of licence in the Gas Act 1986 is captured by existing provisions in those Acts which relate to existing classes of licence.

Article 33 makes a consequential amendment to section 88 of the Energy Act 2008 to provide that the power in that Act, which is available until 2018, to amend licence conditions for the purposes of regulating smart meters includes a power to make necessary amendments to licences of the new classes inserted by this Order.

Article 34 makes a consequential amendment to the Public Interest Disclosure (Prescribed Persons) Order 1999 to provide that the provisions in that Order, which protect employees where they make certain disclosures to the Authority concerning regulated energy activities, extend to the new classes of activity inserted by this Order.

Article 35 makes a consequential amendment to the Electricity Safety, Quality and Continuity Regulations 2002 so that the holders of the new class of licence created by the amendment to the 1989 Act in Article 6 are required to share information and co-operate to ensure that those Regulations can be complied with.

Articles 36 and 37 make consequential amendments to the definition of authorised electricity operator in the standard conditions of electricity distribution and supply licences, to provide that that definition includes reference to the holder of a licence of the new class, or to a person who is exempt from the obligation to hold such a licence.

Article 38 makes transitional provision, providing that persons who undertake the activities inserted into the 1989 Act and the 1986 Acts by Articles 4 and 19 respectively do not require a licence for a period of 36 months after the Order comes into force.

An explanatory memorandum is available alongside this Order on www.legislation.gov.uk . A full impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is published with the Explanatory Memorandum alongside the instrument on www.legislation.gov.uk.