Energy Act 2011

Commentary on Sections

Part 2: Security of Energy Supplies

Chapter 5: Special Administration

Special administration under this Chapter

Section 99: Licence conditions to secure funding of energy supply company administration

281.This section specifies the modifications that the Secretary of State can make to gas and electricity licences to secure funding of energy supply company administration.

282.Subsections (1) and (2) state the modifications that may be made under section 98 include requiring the holder of the licence to raise the charges imposed by them so as to raise such amounts as may be determined by the Secretary of State and to pay the amounts raised to specified persons for the purpose of making good a shortfall in the property of an energy supply company available to meet the expenses of energy supply company administration. This will allow the costs of energy supply company administration to be recouped via the licence mechanism from the industry and ultimately from consumers.

283.Subsection (3) defines a ‘shortfall’ in meeting the expenses of energy administration as the property of the company being insufficient to meet the costs of energy supply company administration. It also defines making payment to make good the shortfall as discharging ‘relevant debts’ which cannot otherwise be met out of the available property.

284.Subsection (4) defines relevant debts and includes obligations to repay the grants, loans, sums paid out under an indemnity and sums paid out under guarantees under sections 165, 166 and 167 of the Energy Act 2004 as applied by section 96 of this Act.