# The Electricity Supplier Obligations (Excluded Electricity) (Amendment) Regulations 2019, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations amend the Electricity Supplier Obligations (Amendment & Excluded Electricity) Regulations 2015 (S.I. 2015/721) (the “ESO Regulations”).
The ESO Regulations enable users of electricity (“EIIs”) in electricity-intensive industries to apply to the Secretary of State for an “EII certificate” in respect of an electricity meter that measures electricity used by the EII to carry out certain industrial processes, referred to in the ESO Regulations as “specified activities”. Where “relevant arrangements” under regulation 7 apply in relation to the meter, the proportion of electricity set out in the EII certificate – which can be up to 85% of the electricity measured by the meter – does not count for the purpose of calculating the EII’s electricity supplier’s financial obligations under the Contracts for Difference, Renewables Obligation and Feed-in Tariffs schemes. The supplier is expected to pass the cost saving on to its customer to reduce the EII’s electricity bill.
The main changes made by these Regulations are as follows.
Eligibility for EII certificates
EIIs carrying out a new type of “specified activity”, the manufacture of grain mill products, will be able to apply for EII certificates: see the amendment to the Schedule to the ESO Regulations.
Eligible EIIs that begin to use a new meter no longer need to wait until after the end of the calendar year before applying for an EII certificate in respect of the meter, but will need to provide at least 3 months’ evidence of the proportion of electricity measured by the meter that was used for a specified activity: see new sub-paragraph (c) of regulation 8(1) and substituted regulation 11.
Two new eligibility criteria relating to State aid will apply where, as part of an application, the Secretary of State has to check an EII’s “electricity cost impact” (as defined in regulation 8(3)). In such cases, EII certificates will not be issued to EIIs that are undertakings in difficulty or subject to an outstanding recovery order made by virtue of Article 108(2) of the Treaty on the Functioning of the European Union: see amendments to regulation 8. The new criteria will not apply if the existing State aid decisions relating to the issue of EII certificates cease to be relevant: see new regulation 13ZB.
Period for which EII certificates are valid
EII certificates issued to EIIs (other than a “new business” trading for four or fewer financial quarters) will be valid until 30th June in the year after the year in which the certificate comes into force, instead of until 31st March: see substituted sub-paragraph (b) of regulation 13(3) of the ESO Regulations.
Period on which proportion of electricity set out in EII certificates is based
The proportion of electricity set out in an EII certificate will be based on the following periods (set out in substituted regulation 11 of the ESO Regulations) for which evidence of the proportion of electricity measured by the meter and used for a specified activity is provided with the application:
if there is a “continuing change” in meter use, the period of up to 12 months beginning on the date on which the last continuing change commenced for which such evidence is provided, as long as there is at least 3 months’ such evidence;
in any other case, either the calendar year preceding the application or, if supply to the meter began after the start of that year, the period of up to 12 months beginning on the date on which supply began for which such evidence is provided.
A “continuing change” in meter use is a change in meter-sharing, or in the use of electricity for a non-specified activity, that commenced after the start of the calendar year preceding the application, has lasted at least 3 months and is still continuing: see new regulation 2A.
Date of quarterly reports
EIIs will be able to provide the quarterly report that must be sent to the Secretary of State while a certificate is valid on any day in a quarter, instead of on the last working day of the quarter: see substituted paragraph (4) of regulation 12 of the ESO Regulations.
Recalculating proportion of electricity set out in EII certificates
EIIs will have to include in the quarterly report more recent evidence, when available, of the proportion of electricity measured by the meter and used for a specified activity in the following circumstances (set out in new paragraph (4C) of regulation 12 of the ESO Regulations):
if the proportion of electricity set out in the EII certificate is based on a period of less than 12 months;
if there is a continuing change in meter use (including one that commenced after the date of the application for the certificate) and the proportion of electricity is not based on the period beginning on the date on which the last continuing change commenced. In such a case, recent evidence need be provided only if there is at least 3 months’ worth.
The evidence included in quarterly reports will be used to recalculate the proportion of electricity set out in the certificate, whilst it remains valid, in accordance with regulation 11 until the proportion is based on a period of 12 months: see new regulation 12A(2) to (4).
An explanatory memorandum is available alongside these Regulations on www.legislation.gov.uk.
An impact assessment of the effect that these Regulations will have on the costs of business and the voluntary sector is available alongside these Regulations on that website.

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Source: https://www.legislation.gov.uk/ukdsi/2019/9780111189856/note (the official version)
Page: https://openlegislation.uk/draft-electricity-supplier-obligations-excluded-electricity-amendment-regulations-2019/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.