Section 3A The principal objective and general duties of the Secretary of State and the Authority.F1 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19

England, Wales and Scotland

(1)

The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) in carrying out their respective functions under this Part is to protect the interests of F2existing and future consumers in relation to electricity conveyed by distribution systems F3or transmission systems F4....

(F51A)

Those interests of existing and future consumers are their interests taken as a whole, including—

(a)

their interests in F6the Secretary of State’s compliance with the duties in sections 1 and 4(1)(b) of the Climate Change Act 2008 (net zero target for 2050 and five-year carbon budgets); F7...

(b)

their interests in the security of the supply of electricity to them F8; and

(c)

their interests in the fulfilment by the Authority, when carrying out its F9designated regulatory functions, of the F10designated regulatory objectives.

(1B)

The Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which the Secretary of State or the Authority (as the case may be) considers is best calculated to further the principal objective, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the generation, transmission, distribution or supply of electricity or the provision or use of electricity interconnectors.

(1C)

Before deciding to carry out functions under this Part in a particular manner with a view to promoting competition as mentioned in subsection (1B), the Secretary of State or the Authority shall consider—

(a)

to what extent the interests referred to in subsection (1) of consumers would be protected by that manner of carrying out those functions; and

(b)

whether there is any other manner (whether or not it would promote competition as mentioned in subsection (1B)) in which the Secretary of State or the Authority (as the case may be) could carry out those functions which would better protect those interests.

(2)

F11In performing the duties under subsections (1B) and (1C), the Secretary of State or the Authority shall have regard to —

(a)

the need to secure that all reasonable demands for electricity are met; and

(b)

the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this Part F12, the Utilities Act 2000 F13, Part 2 or 3 of the Energy Act 2004 F14, Part 2 or 5 of the Energy Act 2008 or section 4, Part 2, F15, sections 26 to 29 of the Energy Act 2010 F16, Part 2 of the Energy Act 2013 F17, the Nuclear Energy (Financing) Act 2022 or F18Chapter 1 of Part 2, Chapters 2 and 3 of Part 4 and sections 245 to 247 of the Energy Act 2023 F19; and

(c)

the need to contribute to the achievement of sustainable development.

(3)

In performing F20the duties under subsections (1B), (1C) and (2), the Secretary of State or the Authority shall have regard to the interests of—

(a)

individuals who are disabled or chronically sick;

(b)

individuals of pensionable age;

(c)

individuals with low incomes; and

(d)

individuals residing in rural areas;

but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer.

(4)

The Secretary of State and the Authority may, in carrying out any function under this Part, have regard to—

(a)

the interests of consumers in relation to gas conveyed through pipes (within the meaning of the M1Gas Act 1986); and

(b)

any interests of consumers in relation to—

(F21i)

communications services and electronic communications apparatus, or

(ii)

water services or sewerage services (within the meaning of the M2Water Industry Act 1991),

which are affected by the carrying out of that function.

(5)

Subject to F22subsections (1B) and (2), F23and to section 132(2) of the Energy Act 2013 (duty to carry out functions in manner best calculated to further delivery of policy outcomes) the Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated—

(a)

to promote efficiency and economy on the part of persons authorised by licences or exemptions to F24distribute, supply or participate in the transmission of electricity F25, F26to co-ordinate and direct the flow of electricity onto or over transmission systems by means of which the transmission of electricity takes place, F27to participate in the operation of electricity interconnectors F28or to provide a smart meter communication service and the efficient use of electricity conveyed by distribution systems F29or transmission systems;

(b)

to protect the public from dangers arising from the generation, transmission, distribution or supply of electricity F30or the provision of a smart meter communication service;

F31(ba)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

to secure a diverse and viable long-term energy supply,

F32and F33... shall, in carrying out those functions, have regard to the effect on the environment of activities connected with the generation, transmission, distribution or supply of electricity or the provision of a smart meter communication service.

(F345A)

In carrying out their respective functions under this Part in accordance with the preceding provisions of this section the Secretary of State and the Authority must each have regard to—

(a)

the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and

(b)

any other principles appearing to him or, as the case may be, it to represent the best regulatory practice.

(F355B)

In subsection (1A)—

F36“the designated regulatory objectives” means the objectives set out in Article 36(c) to (h) of the Electricity Directive but read with the following modifications—
1. (a)
  in Article 36(c), for the words from “between” to the end substitute “ , including enabling the development of appropriate cross-border transmission capacities to meet demand; ”
2. (b)
  in Article 36(d), omit “, in line with general energy policy objectives,
3. (c)
  in Article 36(f), omit “and foster market integration”, and
4. (d)
  in Article 36(g), for “their national market” substitute “ the energy market in Great Britain ”;
F37...
...
...

(6)

In F38subsections F39(1C), (3) and (4) references to consumers include both existing and future consumers.

(7)

In this section and sections 3B and 3C, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to electricity conveyed by distribution systems F40or transmission systems.

(8)

In this Part, unless the context otherwise requires—

“exemption” means an exemption granted under section 5;
“licence” means a licence under section 6 and “licence holder” shall be construed accordingly.

Annotations

Notes on Part I

Modifications

C1

Pt. I modified (5.10.2004) by Energy Act 2004 (c. 20), ss. 184(12), 185(13), 198(2); S.I. 2004/2575, art. 2(1), Sch. 1

C2

Pt. I modified (S.) (30.11.2005) by The Electricity from Non-Fossil Fuel Sources (Scotland) Saving Arrangements Order 2005 (S.S.I. 2005/549), arts. 1(1), 9

C3

Pt. 1 excluded (30.12.2015) by The Port Talbot Steelworks Generating Station Order 2015 (S.I. 2015/1984), arts. 1, 7(2) (with art. 26)

C4

Pt. I (ss. 1-64) applied (1.10.2001) by S.I. 2001/3264, regs. 4(2), 5(2)

C5

Pt. I (ss. 1-64) amended (E.W.) (27.10.2000) by S.I. 2000/2727, art. 10

Pt. I (ss. 1-64) amended (7.11.2000) by 2000 c. 27, s. 105(1)(a); S.I. 2000/2974, art. 2, Sch. (subject to transitional provisions in arts. 3-12)

Pt. I (ss. 1-64) amended (E.W.) (1.10.2001) by S.I. 2000/2727, art. 10 (as substituted (1.10.2001) by S.I. 2001/3268, art. 2(13))

Notes on Introductory

Modifications

C1: Ss. 3A-3D applied (18.2.2014) by Energy Act 2013 (c. 32), ss. 136(2), 156(2)

Section 3A The principal objective and general duties of the Secretary of State and the Authority.F1C1C2C3C4C5C6C7C8C9C10C11C12C13C14C15C16C17C18C19

Annotations

Textual amendments

Marginal citations

Modifications

Notes on Part I

Modifications

Notes on Introductory

Modifications

Section 3A The principal objective and general duties of the Secretary of State and the Authority.F1 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 C16 C17 C18 C19