Regulation 11 Part 7A inserted

After regulation 59 insert—

“PART 7A

Special administration regime

Interpretation of Part 7A

59A.

In this Part—

• “court” has the meaning given in section 171(1) of the Energy Act 2004^f1;

• “protected heat network company” means a company^f2 that holds a heat network authorisation other than any of the following—

  1. (a)

     a registered provider of social housing^f3;

  2. (b)

     a body registered as a social landlord under Part 1 of the Housing Act 1996^f4 (social rented sector regulated by Welsh Ministers);

  3. (c)

     a body registered in the register maintained under section 20(1) of the Housing (Scotland) Act 2010^f5.

Heat network administration orders

59B.

(1)

The court may make a heat network administration order in relation to a protected heat network company.

(2)

A “heat network administration order” is an order directing that, while the order is in force, the affairs, business and property of the company are to be managed by a person appointed by the court.

(3)

The person appointed by the court is the “heat network administrator” of the company.

(4)

The heat network administrator of a protected heat network company must manage the company’s affairs, business and property, and exercise all other functions that the person has as heat network administrator, so as to achieve the objectives set out in regulation 59C so far as possible.

(5)

Where a non-GB company^f6 is subject to a heat network administration order—

(a)

the effect of the order is limited to the company’s affairs and business so far as carried on in Great Britain and to its property in Great Britain only;

(b)

references in this regulation to the affairs, business and property of the company must be construed accordingly.

Objectives of heat network administration order

59C.

(1)

The objectives of a heat network administration order are to secure the following—

(a)

that the supply of heating, cooling or hot water is continued at the lowest cost that it is reasonably practicable to incur;

(b)

insofar as consistent with sub-paragraph (a), that the company’s relevant heat network is, and continues to be maintained and developed as, an efficient and economical system; and

(c)

that it becomes unnecessary, by using one or more of the means referred to in paragraph (2), for the order to remain in force for those purposes.

(2)

The means are—

(a)

the rescue as a going concern of the company subject to the heat network administration order;

(b)

transfers falling within paragraph (3);

(c)

the heat network administrator making arrangements for securing that heat network consumers supplied with heating, cooling or hot water by the company’s relevant heat network have an alternative supply of heating or, as the case may be, cooling or hot water.

(3)

A transfer falls within this paragraph if it is a transfer as a going concern of so much of the undertaking of the company subject to the heat network administration order as is associated with the company’s relevant heat network—

(a)

to another company; or

(b)

as respects different parts of that undertaking, to two or more different companies,

as it is appropriate to transfer for the purposes of achieving the objectives of the order.

(4)

The means by which a transfer falling within paragraph (3) may be effected include—

(a)

a transfer to a wholly-owned subsidiary of the company;

(b)

a transfer to another company of securities of a wholly-owned subsidiary to which there has been a transfer falling within sub-paragraph (a).

(5)

The objectives of a heat network administration order may be achieved by a transfer falling within paragraph (3) only to the extent that—

(a)

the rescue as a going concern of the company subject to the order is not reasonably practicable or is not reasonably practicable without such a transfer;

(b)

the rescue of the company as a going concern will not achieve the objectives or will not do so without such a transfer;

(c)

such a transfer would produce a result for the company’s creditors as a whole that is better than the result that would be produced without it; or

(d)

such a transfer would, without prejudicing the interests of the company’s creditors as a whole, produce a result for that company’s members as a whole that is better than the result that would be produced without it.

(6)

In this regulation, a reference to the relevant heat network of a company subject to a heat network administration order is a reference to—

(a)

the relevant heat network specified in the company’s heat network authorisation; or

(b)

where regulation 27 applies, the relevant heat network to which the company’s heat network authorisation relates.

Heat network administration orders: application of certain provisions of Energy Act 2004

59D.

(1)

Sections 156 to 167 of, and Schedules 20 and 21 to, the Energy Act 2004^f7 (special administration regime for energy licensees) apply in relation to a heat network administration order as they apply in relation to an energy administration order (as defined in section 154(1) of that Act), with the modifications set out in paragraphs (2) to (5).

(2)

Those provisions must be read as if—

(a)

for “energy administration” in each place there were substituted “heat network administration”;

(b)

for “energy administrator” in each place there were substituted “heat network administrator”;

(c)

for “protected energy company” in each place there were substituted “protected heat network company”.

(3)

Section 159 must be read as if in subsection (3) for “or section 44 of the Energy Act 2023” there were substituted “, section 44 of the Energy Act 2023 or regulation 59D of the 2025 Regulations”.

(4)

Schedule 20 must be read as if—

(a)

in paragraph 12—

(i)

in the opening words for “the existing text is to be sub-paragraph (1) and after that sub-paragraph” there were substituted “after sub-paragraph (2)”;

(ii)

for the inserted text there were substituted—

“(3)

The heat network administrator of a company has the power to act on behalf of the company for the purposes of any enactment or subordinate legislation which confers a power on the company, or imposes a duty on it.

(4)

In sub-paragraph (3), “enactment” has the same meaning as in the Energy Act 2004.”;

(b)

in paragraph 25 for “sub-paragraphs (2)(b) and (3)” there were substituted “sub-paragraphs (2)(b) and (ba), (3) and (3A)”;

(c)

in paragraph 32(1)—

(i)

in paragraph (a) ““correspondence”,” were omitted;

(ii)

for paragraphs (c) and (d) there were substituted—

“(c)

after the definition of “appropriate value” (as inserted by paragraph (b)) insert—

• ““company”, “court” and “heat network administration order” have the same meanings as in Chapter 3 of Part 3 of the Energy Act 2004, as applied by regulation 59D of the Heat Networks (Market Framework) (Great Britain) Regulations 2025 (the “2025 Regulations”);”

  1. (d)

     after the definition of “floating charge” insert—

• “GEMA” means the Gas and Electricity Markets Authority;

• “heat network administration application” means an application to the court for a heat network administration order under Chapter 3 of Part 3 of the Energy Act 2004, as applied by regulation 59D of the 2025 Regulations;”;

(iii)

in paragraph (e)—

(aa)

in the inserted definition of “objective” for “section 155 of the Energy Act 2004” there were substituted “regulation 59C of the 2025 Regulations”;

(bb)

in the inserted definition of “prescribed” after “Energy Act 2004” there were inserted “, as applied by regulation 59D of the 2025 Regulations”;

(d)

after paragraph 32(1) there were inserted—

“(1A)

Omit sub-paragraphs (1A) and (1B) of that paragraph.”;

(e)

in paragraph 36(1) for “section 154(4) of this Act” there were substituted “regulation 59B(5) of the 2025 Regulations”;

(f)

in paragraph 43 in the inserted text after “the Energy Act 2004” there were inserted “and regulation 59D of the Heat Networks (Market Framework) (Great Britain) Regulations 2025”;

(g)

in paragraph 44(5) in the inserted text after “the Energy Act 2004” there were inserted “and regulation 59D of the Heat Networks (Market Framework) (Great Britain) Regulations 2025”;

(h)

in paragraph 45 after “section 157(1)(e) of this Act” there were inserted “, as applied by regulation 59D of the 2025 Regulations”;

(i)

in paragraph 46(1)—

(i)

for paragraph (b) there were substituted—

“(b)

any other provision that relates to insolvency, or makes provision by reference to anything that is or may be done under the Insolvency Act 1986^f8, and is—

(i)

contained in an Act passed before the Energy Act 2023 or in the same Session; or

(ii)

made under an Act before the order comes into force,”;

(ii)

in the words following paragraph (b) for “section 96 of the Energy Act 2011” there were substituted “regulation 59D of the 2025 Regulations”;

(j)

in paragraph 47 in the definitions of “enters energy administration” and “in energy administration” after “Part 1 of this Schedule” there were inserted “and regulation 59D of the 2025 Regulations”.

(5)

Schedule 21 must be read as if—

(a)

for “energy transfer scheme” in each place there were substituted “heat network transfer scheme”;

(b)

for “old energy company” in each place there were substituted “old heat network company”;

(c)

for “new energy company” in each place there were substituted “new heat network company”;

(d)

in paragraph 1(b) for “section 155(3)” there were substituted “regulation 59C(3) of the 2025 Regulations”;

(e)

in paragraph 5 for “relevant licence” or “licence” in each place there were substituted “heat network authorisation”;

(f)

in paragraph 12—

(i)

for “subsection (3) of section 155” there were substituted “paragraph (3) of regulation 59C of the 2025 Regulations”;

(ii)

for “subsection (4)(a) of that section” there were substituted “paragraph (4)(a) of that regulation”.

(6)

Sections 171 and 196 of the Energy Act 2004^f9 (interpretation) apply for the purposes of the application by paragraph (1) of the provisions of the Energy Act 2004 referred to in that paragraph, with the modifications set out in paragraph (7).

(7)

Section 171(1) must be read as if—

(a)

the following definitions were omitted—

(i)

“energy administration order”;

(ii)

“energy administration rules”;

(iii)

“energy administrator”;

(iv)

“objective of the energy administration”;

(v)

“protected energy company”;

(vi)

“relevant licence”;

(b)

the following definitions were inserted at the appropriate places—

(i)

““2025 Regulations” means the Heat Networks (Market Framework) (Great Britain) Regulations 2025;”;

(ii)

““heat network administration” means the administration of a protected heat network company in accordance with a heat network administration order;”;

(iii)

““heat network administration order” has the meaning given in regulation 59B of the 2025 Regulations;”;

(iv)

““heat network administration rules” means rules made under section 411 of the 1986 Act by virtue of section 159(3) of this Act, for the purpose of giving effect to this Chapter as applied by regulation 59D of the 2025 Regulations;”;

(v)

““heat network administrator” has the meaning given in regulation 59B of the 2025 Regulations;”;

(vi)

““heat network authorisation” means a heat network authorisation under the 2025 Regulations;”;

(vii)

““objective of the heat network administration” is to be construed in accordance with regulation 59C of the 2025 Regulations;”;

(viii)

““protected heat network company” has the meaning given in regulation 59A of the 2025 Regulations;”.”.