# The Electricity and Gas (Internal Markets) Regulations 2017, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations are made under section 2(2) of the European Communities Act 1972. They make amendments to the electricity and gas regulatory regimes in Great Britain.
Regulations 2 and 3 amend:
provisions of the Gas Act 1986 (“the 1986 Act”) which implement article 9 of Directive 2009/73/EC of the European Parliament and of the Council concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (OJ No L 211, 14.8.2009, p.94) (“the Gas Directive”) in respect of the ownership arrangements permitted for certain gas transporters and operators of gas interconnectors, and
provisions of the Electricity Act 1989 (“the 1989 Act”) which implement article 9 of Directive 2009/72/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC (OJ No L 211, 14.8.2009, p.55) (“the Electricity Directive”), in respect of the ownership arrangements permitted for certain electricity transmission operators and operators of electricity interconnectors.
Regulation 2 amends the definition of “relevant producer or supplier” in section 8Q of the 1986 Act. The effect of the amendment is that, in determining whether a person meets the ownership unbundling requirement in section 8H, the Gas and Electricity Markets Authority (“the Authority”) must take into account producers or suppliers owned or controlled by or connected with that person wherever they are located, instead of only taking into account such producers or suppliers in an EEA state. Regulation 3 makes a corresponding amendment to section 10O of the 1989 Act which changes, in the same way, the matters which the Authority must take into account in determining whether a person meets the ownership unbundling requirement in section 10F of that Act.
Regulation 7 makes transitional provisions in relation to these amendments. Paragraphs (1) and (2) ensure that the amended definitions of “relevant producer or supplier” do not apply in relation to applications to be certified as independent which were made, or reviews of certification which were commenced, before the amendments come into force. Paragraph (3) makes clear that the Authority is not required to review existing certifications under section 8K of the 1986 Act or section 10I of the 1989 Act solely because of the change to the definition of “relevant producer or supplier”.
Regulation 4 amends the definition of “regulated person” in section 25(8) of the 1989 Act to include a nominated electricity market operator (“NEMO”). A NEMO is an entity which has been designated by a national regulatory authority of a Member State under Commission Regulation (EU) No 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (“the CACM Regulation”) to perform certain functions under that Regulation relating to cross-border trade in electricity. The effect of the amendment is that the Authority’s enforcement powers in sections 25 to 28 of the 1989 Act shall apply to NEMOs in respect of obligations which are specified in Schedule 6A as ‘relevant requirements’ for NEMOs. Regulation 6(3) inserts a new paragraph 9B into Schedule 6A to the 1989 Act to specify certain requirements in the CACM Regulation as relevant requirements for NEMOs. The requirements so specified are relevant requirements for any NEMO in respect of its operations in Great Britain, whether the NEMO has been designated as such by the Authority or by a competent authority in another Member State or Northern Ireland.
Regulation 6(2) makes a minor amendment to the 1989 Act in consequence of amendments to Regulation (EC) No 714/2009 of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity, and regulation 5(2) and (4) make consequential amendments to definitions in section 64(1) of the 1989 Act.
Regulation 8 amends regulation 51 of the Electricity and Gas (Internal Markets) Regulations 2011 (“the 2011 Regulations”) to add these Regulations to a list of instruments implementing EU legislation relating to the electricity and gas internal markets, which are subject to review by the Secretary of State.
An impact assessment for the application of the Authority’s enforcement powers to NEMOs is available from the Department for Business, Energy and Industrial Strategy, 1 Victoria Street, London SW1H 0ET, and is published alongside this instrument on legislation.gov.uk. An impact assessment has not been prepared for the other amendments made by this instrument as no significant impacts on the private or voluntary sectors are foreseen.
Transposition notes setting out how the main elements of the Electricity Directive and the Gas Directive are transposed into the law of Great Britain are published alongside the 2011 Regulations on legislation.gov.uk.

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Source: https://www.legislation.gov.uk/uksi/2017/493/note (the official version)
Page: https://openlegislation.uk/electricity-and-gas-internal-markets-regulations-2017/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.