Office of Public Sector Information
PART I continued
(1) In this Part, unless the context otherwise requires—
“the 1973 Act” means the [1973 c. 41.] Fair Trading Act 1973;
“the 1980 Act” means the [Competition Act 1980] ;
“authorised area” has the meaning given by section 7(9) above;
“electrical plant” means any plant, equipment, apparatus or appliance used for, or for purposes connected with, the generation, transmission or supply of electricity, other than—
an electric line;
a meter used for ascertaining the quantity of electricity supplied to any premises; or
an electrical appliance under the control of a consumer;
“electric line” means any line which is used for carrying electricity for any purpose and includes, unless the context otherwise requires—
any support for any such line, that is to say, any structure, pole or other thing in, on, by or from which any such line is or may be supported, carried or suspended;
any apparatus connected to any such line for the purpose of carrying electricity; and
any wire, cable, tube, pipe or other similar thing (including its casing or coating) which surrounds or supports, or is surrounded or supported by, or is installed in close proximity to, or is supported, carried or suspended in association with, any such line;
“exemption” means an exemption under section 5 above;
“extension”, in relation to a generating station, has the meaning given by section 36(8) above and “extend” shall be construed accordingly;
“final order” and “provisional order” have the meanings given by section 25(8) above;
“generating station”, in relation to a generating station wholly or mainly driven by water, includes all structures and works for holding or channelling water for a purpose directly related to the generation of electricity by that station;
“high voltage” means—
in relation to England and Wales, an electric line of a nominal voltage exceeding 132 kilovolts;
in relation to Scotland, an electric line of a nominal voltage not less than 132 kilovolts,
and “low voltage line” shall be construed accordingly;
“information” includes accounts, estimates and returns;
“licence” means a licence under section 6 above and “licence holder” shall be construed accordingly;
“line” means any wire, cable, tube, pipe or other similar thing (including its casing or coating) which is designed or adapted for use in carrying electricity;
“the Monopolies Commission” means the Monopolies and Mergers Commission;
“notice” means notice in writing;
“premises” includes any land, building or structure;
“prescribed”, except in sections 39 and 60 above and Schedule 7 to this Act, means prescribed by regulations made by the Secretary of State;
“private electricity supplier” has the meaning given by section 17(1) above;
“public electricity supplier” has the meaning given by section 6(9) above;
“relevant condition” and “relevant requirement” have the meanings given by section 25(8) above;
“supply”, in relation to electricity, has the meaning given by section 4(4) above, and cognate expressions shall be construed accordingly;
“tariff customer” has the meaning given by section 22(4) above;
“transmit”, in relation to electricity, has the meaning given by section 4(4) above, and cognate expressions shall be construed accordingly;
“working day” means any day other than a Saturday, a Sunday, Christmas Day, Good Friday or a day which is a bank holiday within the meaning of the [1971 c. 80.] Banking and Financial Dealings Act 1971.
(2) The provisions of section 3 of the [1972 c. 59.] Administration of Justice (Scotland) Act 1972 (power of arbiter to state case to Court of Session) shall not apply in relation to any determination under this Part by an arbiter.
(1) On such day as the Secretary of State may by order appoint for the purposes of this subsection and subsection (5) of section 66 below (in this Part referred to, in relation to any transfer effected by either subsection, as “the transfer date”, all property, rights and liabilities to which each Area Board is entitled or subject immediately before that date shall become by virtue of this subsection property, rights and liabilities of a company which, in relation to that Board, is nominated for the purposes of this subsection by the Secretary of State.
(2) Subject to subsection (3) below, the Secretary of State may, after consulting the Area Board concerned, by order nominate for the purposes of subsection (1) above any company formed and registered under the [1985 c. 6.] Companies Act 1985.
(3) On the transfer date each company so nominated must be a company limited by shares which is wholly owned by the Crown.
(4) The Secretary of State shall not exercise any power conferred on him by this section or sections 66 to 69 below except with the consent of the Treasury.
(5) In this Part “supply company” means a company nominated for the purposes of subsection (1) above.
(1) Before such date as the Secretary of State may direct, the Generating Board shall make a scheme for the division of all its property, rights and liabilities between three or more companies nominated by the Secretary of State for the purposes of this subsection; and of the companies so nominated—
(a) two shall be designated as generating companies; and
(b) one shall be designated as the transmission company.
(2) Before such date as the Secretary of State may direct, the Electricity Council shall make a scheme—
(a) for the transfer to a company nominated for the purposes of this subsection by the Secretary of State; or
(b) for the division between two or more companies so nominated,
of all its property, rights and liabilities (other than excepted rights and liabilities).
(3) Subject to subsection (4) below, the Secretary of State may, after consulting the transferor, by order nominate for the purposes of subsection (1) or (2) above any company formed and registered under the [1985 c. 6.] Companies Act 1985.
(4) On the transfer date each company so nominated must be—
(a) a company limited by shares which is wholly owned by the Crown; or
(b) in the case of a company nominated for the purposes of subsection (2) above, a company limited by guarantee of which no person other than the Treasury or the Secretary of State, or a nominee of the Treasury or the Secretary of State, is a member.
(5) Subject to the provision of section 70 below, on the transfer date—
(a) all property, rights and liabilities to which immediately before that date the Generating Board was entitled or subject; and
(b) all property, rights and liabilities to which immediately before that date the Electricity Council was entitled or subject (other than excepted rights and liabilities),
shall become by virtue of this subsection property, rights and liabilities of the company to which they are allocated by the scheme under subsection (1) or, as the case may be, subsection (2) above.
(6) In this section “excepted rights and liabilities” means—
(a) any rights and liabilities with respect to corporation tax (including rights to receive any sums by way of repayment supplement and liabilities to pay any sums by way of interest or penalty);
(b) any rights and liabilities arising under an agreement which relates to any such rights and liabilities as are mentioned in paragraph (a) above and is specified or is of a description specified by the scheme made under subsection (2) above; and
(c) any rights and liabilities transferred by section 91 below.
(1) Before such date as the Secretary of State may direct, each of the Scottish Boards shall, in consultation with the other, make a scheme for the transfer of all their property, rights and liabilities (other than excepted rights and liabilities) to one or more of three or more companies nominated by the Secretary of State for the purposes of this subsection; and of the companies so nominated—
(a) two shall be designated as the Scottish electricity companies; and
(b) one shall be designated as the Scottish nuclear company.
(2) Subject to subsection (3) below, the Secretary of State may, after consultation with the Scottish Boards, by order nominate for the purposes of subsection (1) above any company formed and registered in Scotland under the Companies Act 1985.
(3) On such day as the Secretary of State may by order appoint for the purposes of subsection (4) below (in this Part referred to, in relation to any transfer effected by that subsection, as “the transfer date”) each company so nominated must be a company limited by shares which is wholly owned by the Crown.
(4) Subject to the provisions of section 70 below, on the transfer date all property, rights and liabilities (other than excepted rights and liabilities) to which immediately before that date the Scottish Boards were entitled or subject shall become by virtue of this subsection property, rights and liabilities of the company to which they are allocated by a scheme under subsection (1) above.
(5) In this section “excepted rights and liabilities” means any rights and liabilities transferred by section 91 below.
(1) This section applies to any scheme under subsection (1) or (2) of section 66 or subsection (1) of section 67 above (in this Part referred to as a “transfer scheme”); and in this section and section 69 below “the relevant subsection”, in relation to such a scheme, means that subsection.
(2) A transfer scheme may—
(a) define the property, rights and liabilities to be allocated to a particular company nominated for the purposes of the relevant subsection—
(i) by specifying or describing the property, rights and liabilities in question;
(ii) by referring to all the property, rights and liabilities comprised in a specified part of the transferor’s undertaking; or
(iii) partly in the one way and partly in the other;
(b) provide that any rights or liabilities specified or described in the scheme shall be enforceable either by or against either or any, or by or against both or all, of two or more companies nominated for the purposes of the relevant subsection;
(c) impose on any company nominated for the purposes of the relevant subsection an obligation to enter into such written agreements with, or execute such other instruments in favour of, any other company so nominated as may be specified in the scheme; and
(d) make such supplemental, incidental and consequential provision as the transferor considers appropriate (including provision specifying the order in which any transfers or transactions are to be regarded as taking effect).
(3) An obligation imposed by a provision included in a transfer scheme by virtue of subsection (2)(c) above shall be enforceable by civil proceedings by the other company for an injunction or for interdict or for any other appropriate relief.
(4) A transaction of any description which is effected in pursuance of such a provision as is mentioned in subsection (3) above—
(a) shall have effect subject to the provisions of any enactment which provides for transactions of that description to be registered in any statutory register; but
(b) subject to that, shall be binding on all other persons, notwithstanding that it would, apart from this subsection, have required the consent or concurrence of any other person.
(5) Where a lease of any land is granted in pursuance of such a provision as is mentioned in subsection (3) above, any right of pre-emption or other like right affecting that land—
(a) shall not become exercisable by reason of the grant of the lease; but
(b) shall have effect as if the lessee were the same person in law as the lessor.
(1) A transfer scheme shall not take effect unless it is approved by the Secretary of State; and the Secretary of State may modify such a scheme before approving it.
(2) If, in relation to a transfer scheme—
(a) the transferor fails, before the date specified in the Secretary of State’s direction under the relevant subsection, to submit the scheme for the approval of the Secretary of State; or
(b) the Secretary of State decides not to approve the scheme that has been submitted to him by the transferor (either with or without modifications),
the Secretary of State may himself make the scheme.
(3) It shall be the duty of the transferor to provide the Secretary of State with all such information and other assistance as he may require for the purposes of or in connection with the exercise, in relation to a transfer scheme, of any power conferred on him by subsection (1) or (2) above.
(4) The Secretary of State shall not exercise any power conferred on him by subsection (1) or (2) above except after consultation with the transferor and—
(a) in the case of a scheme under section 66(1) above, the Area Boards; and
(b) in the case of a scheme under section 67(1) above, the other Scottish Board.
The provisions of Schedule 10 to this Act shall apply, to the extent there mentioned, to any transfer which is effected by subsection (5) of section 66 or subsection (4) of section 67 above; and those subsections shall have effect subject to the provisions of that Schedule.
(1) As a consequence of the vesting in a company nominated for the purposes of section 65(1), 66(1) or (2) or 67(1) above (in this Part referred to as a “successor company”) of any property, rights and liabilities, the company shall issue such securities of the company as the Secretary of State may from time to time direct—
(a) to the Treasury or the Secretary of State; or
(b) to any person entitled to require the issue of the securities following their initial allotment to the Treasury or the Secretary of State.
(2) The Secretary of State shall not give a direction under subsection (1) above in relation to a successor company at a time when the company has ceased to be wholly owned by the Crown.
(3) Securities required to be issued in pursuance of this section shall be issued or allotted at such time or times and on such terms as the Secretary of State may direct.
(4) Shares in a company which are issued in pursuance of this section—
(a) shall be of such nominal value as the Secretary of State may direct; and
(b) shall be issued as fully paid and treated for the purposes of the [1985 c. 6.] Companies Act 1985 as if they had been paid up by virtue of the payment to the company of their nominal value in cash.
(5) The Secretary of State shall not exercise any power conferred on him by this section, or dispose of any securities issued or of any rights to securities initially allotted to him in pursuance of this section, without the consent of the Treasury.
(6) Any dividends or other sums received by the Treasury or the Secretary of State in right of or on the disposal of any securities or rights acquired by virtue of this section shall be paid into the Consolidated Fund.
(1) The Treasury or, with the consent of the Treasury, the Secretary of State may at any time acquire—
(a) securities of a successor company; or
(b) rights to subscribe for any such securities.
(2) The Secretary of State shall not dispose of any securities or rights acquired under this section without the consent of the Treasury.
(3) Any expenses incurred by the Treasury or the Secretary of State in consequence of the provisions of this section shall be paid out of money provided by Parliament.
(4) Any dividends or other sums received by the Treasury or the Secretary of State in right of, or on the disposal of, any securities or rights acquired under this section shall be paid into the Consolidated Fund.
(1) The Treasury or, with the consent of the Treasury, the Secretary of State may, for the purposes of section 71 or 72 above or section 80 below, appoint any person to act as the nominee, or one of the nominees, of the Treasury or the Secretary of State; and—
(a) securities of a successor company may be issued under section 71 above or section 80 below to any nominee of the Treasury or the Secretary of State appointed for the purposes of that section or to any person entitled to require the issue of the securities following their initial allotment to any such nominee; and
(b) any such nominee appointed for the purposes of section 72 above may acquire securities or rights under that section,
in accordance with directions given from time to time by the Treasury or, with the consent of the Treasury, by the Secretary of State.
(2) Any person holding any securities or rights as a nominee of the Treasury or the Secretary of State by virtue of subsection (1) above shall hold and deal with them (or any of them) on such terms and in such manner as the Treasury or, with the consent of the Treasury, the Secretary of State may direct.
(1) As soon as he considers expedient and, in any case, not later than six months after any operating company ceases to be wholly owned by the Crown, the Secretary of State shall by order fix a target investment limit in relation to the shares for the time being held in that company by virtue of any provision of this Part by the Treasury and their nominees and by the Secretary of State and his nominees (in this section referred to as “the Government shareholding”).
(2) The target investment limit for the Government shareholding in an operating company shall be expressed as a proportion of the voting rights which are exercisable in all circumstances at general meetings of the company (in this section referred to as “the ordinary voting rights”).
(3) The first target investment limit fixed under this section for the Government shareholding in a particular company shall not exceed, by more than 0.5 per cent. of the ordinary voting rights, the proportion of those rights which is in fact carried by the Government shareholding in that company at the time when the order fixing the limit is made.
(4) The Secretary of State may from time to time by order fix a new target investment limit for the Government shareholding in an operating company in place of the one previously in force under this section; but—
(a) any new limit must be lower than the one it replaces; and
(b) an order under this section may only be revoked by an order fixing a new limit.
(5) It shall be the duty of the Treasury and of the Secretary of State so to exercise—
(a) their powers under section 72 above and any power to dispose of any shares held by virtue of any provision of this Part; and
(b) their power to give directions to their respective nominees,
as to secure in relation to each operating company that the Government shareholding in that company does not carry a proportion of the ordinary voting rights exceeding any target investment limit for the time being in force under this section in relation to that company.
(6) Notwithstanding subsection (5) above but subject to subsection (7) below, the Treasury or the Secretary of State may take up, or direct any nominee of the Treasury or of the Secretary of State to take up, any rights which are for the time being available to them or him, or to the nominee, either—
(a) as an existing holder of shares or other securities of an operating company; or
(b) by reason of the rescission of any contracts for the sale of such shares or securities.
(7) If, as a result of anything done under subsection (6) above, the proportion of the ordinary voting rights carried by the Government shareholding in an operating company at any time exceeds the target investment limit for the time being in force under this section in relation to that company, it shall be the duty of the Treasury or, as the case may be, the Secretary of State to comply with subsection (5) above as soon after that time as is reasonably practicable.
(8) For the purposes of this section the temporary suspension of any of the ordinary voting rights shall be disregarded.
(9) The Secretary of State shall not exercise any power conferred on him by this section except with the consent of the Treasury.
(10) In this Part “operating company” means a supply company, the transmission company, a generating company, a Scottish electricity company or the Scottish nuclear company.
(1) If the Secretary of State with the approval of the Treasury so directs at any time before a successor company ceases to be wholly owned by the Crown, such sum as may be specified in the direction but not exceeding—
(a) in the case of a supply company, the accumulated realised profits of the transferor;
(b) in the case of a Scottish electricity company, the aggregate of such proportion of the accumulated realised profits of the transferor as is determined by or under the transfer scheme and any accumulated realised profits arising (after compliance with any direction to the company under subsection (2) of section 80 below) by virtue of the extinguishment of liabilities of the company by an order under subsection (1) of that section;
(c) in any other case, such proportion of the accumulated realised profits of the transferor as is determined by or under the transfer scheme,
shall be carried by the company to a reserve (in this section referred to as “the statutory reserve”).
(2) A company having a statutory reserve shall not apply it except in paying up unissued shares of the company to be allotted to members of the company as fully paid bonus shares.
(3) Notwithstanding subsection (2) above, the statutory reserve of a company shall not count as an undistributable reserve of the company for the purposes of section 264(3)(d) of the [1985 c. 6.] Companies Act 1985; but for the purpose of determining under that section whether a company with a statutory reserve may make a distribution at any time any amount for the time being standing to the credit of the reserve shall be treated for the purposes of section 264(3)(c) of that Act as if it were unrealised profits of the company.
(1) The following provisions of this section shall have effect for the purposes of any statutory accounts of a successor company, that is to say, any accounts prepared by such a company for the purpose of any provision of the Companies Act 1985 (including group accounts).
(2) The vesting in the company effected by virtue of this Part shall be taken to have been effected immediately after the end of the last complete accounting year of the transferor to end before the transfer date and—
(a) in the case of a supply company, to have been a vesting of all the property, rights and liabilities to which the transferor was entitled or subject immediately before the end of the year;
(b) in any other case, to have been a vesting of such of the property, rights and liabilities to which the transferor was so entitled or subject as are determined by or under the transfer scheme.
(3) The value of any asset and the amount of any liability which is taken by virtue of subsection (2) above to have been vested in the company shall be taken to have been—
(a) in the case of a supply company, the value or amount assigned to the asset or liability for the purposes of the corresponding statement of accounts prepared by the transferor in respect of the last complete accounting year of the transferor to end before the transfer date:
(b) in any other case, the value or amount so assigned or, if the asset or liability is part only of an asset or liability to which a value or amount is so assigned, so much of that value or amount as may be determined by or under the transfer scheme.
(4) The amount to be included in respect of any item shall be determined as if—
(a) in the case of a supply company, anything done by the transferor (whether by way of acquiring, revaluing or disposing of any asset or incurring, revaluing or discharging any liability, or by carrying any amount to any provision or reserve, or otherwise);
(b) in any other case, so much of anything so done as may be determined by or under the transfer scheme,
had been done by the company. (5) Without prejudice to the generality of the preceding provisions, the amount to be included from time to time in any reserves of the company as representing the company’s accumulated realised profits shall be determined as if—
(a) in the case of a supply company, any profits realised and retained by the transferor;
(b) in any other case, such proportion of any such profits as is determined by or under the transfer scheme,
had been realised and retained by the company.
(6) In this section “complete accounting year,” in relation to the transferor, means an accounting year of the transferor ending on 31st March.
(1) If articles of association of a successor company confer on the Secretary of State powers exercisable with the consent of the Treasury for, or in connection with, restricting the sums of money which may be borrowed or raised by the group during any period, those powers shall be exercisable in the national interest notwithstanding any rule of law and the provisions of any enactment.
(2) For the purposes of this section an alteration of the articles of association of a successor company shall be disregarded if the alteration—
(a) has the effect of conferring or extending any such power as is mentioned in subsection (1) above; and
(b) is made at a time when that company has ceased to be wholly owned by the Crown.
(3) In this section—
“group”, in relation to a company, means that company and all of its subsidiaries taken together;
“subsidiary” has the same meaning as in the [1985 c. 6.] Companies Act 1985.
(1) Subject to section 81 below, the Secretary of State may, with the approval of the Treasury, make loans of such amounts as he thinks fit to any successor company which is for the time being wholly owned by the Crown.
(2) Subject to section 80 below, any loans which the Secretary of State makes under this section shall be repaid to him at such times and by such methods, and interest thereon shall be paid to him at such rates and at such times, as he may, with the approval of the Treasury, from time to time direct.
(3) The Treasury may issue out of the National Loans Fund to the Secretary of State such sums as are required by him for making loans under this section.
(4) Any sums received under subsection (2) above by the Secretary of State shall be paid into the National Loans Fund.
(5) It shall be the duty of the Secretary of State as respects each financial year—
(a) to prepare, in such form as the Treasury may direct, an account of sums issued to him in pursuance of subsection (3) above and of sums received by him under subsection (2) above and of the disposal by him of the sums so issued or received; and
(b) to send the account to the Comptroller and Auditor General not later than the end of the month of August in the following financial year;
and the Comptroller and Auditor General shall examine, certify and report on the account and shall lay copies of it and of his report before each House of Parliament.
(1) Subject to section 81 below, the Treasury may guarantee, in such manner and on such terms as they may think fit, the repayment of the principal of, the payment of interest on, and the discharge of any other financial obligation in connection with, any sums which are borrowed from a person other than the Secretary of State by any successor company which is for the time being wholly owned by the Crown.
(2) Immediately after a guarantee is given under this section, the Treasury shall lay a statement of the guarantee before each House of Parliament; and immediately after any sum is issued for fulfilling a guarantee so given, the Treasury shall so lay a statement to that sum.
(3) Any sums required by the Treasury for fulfilling a guarantee under this section shall be charged on and issued out of the Consolidated Fund.
(4) If any sums are issued in fulfilment of a guarantee given under this section the company whose obligations are so fulfilled shall make to the Treasury, at such times and in such manner as the Treasury may from time to time direct—
(a) payments of such amounts as the Treasury may so direct in or towards repayment of the sums so issued; and
(b) payments of interest on what is outstanding for the time being in respect of sums so issued at such rate as the Treasury may so direct.
(5) Any sums received under subsection (4) above by the Treasury shall be paid into the Consolidated Fund.
(1) The Secretary of State may by order extinguish all or any of the liabilities of a successor company in Scotland in respect of the principal of such relevant loans as may be specified in the order; and the assets of the National Loans Fund shall accordingly be reduced by amounts corresponding to any liabilities so extinguished.
(2) Where the Secretary of State has made an order under subsection (1) above and he considers it appropriate to do so, he may from time to time give a direction under this subsection to the company whose liabilities are extinguished by the order, or to a company or companies wholly owning the company whose liabilities are so extinguished; and a company to which a direction is given shall, as a consequence of the making of the order, issue such securities of the company as may be specified or described in the direction—
(a) to the Treasury or the Secretary of State;
(b) to any person entitled to require the issue of the securities following their initial allotment to the Treasury or the Secretary of State; or
(c) if it is the company whose liabilities are extinguished by the order, to a company or companies wholly owning that company.
(3) For the purpose of any statutory accounts of a company to whom securities are issued by virtue of subsection (2)(c) above, the value at the time of its issue of any such security shall be taken—
(a) in the case of a share, to have been equal to its nominal value; and
(b) in the case of a debenture, to have been equal to the principal sum payable under the debenture,
and such nominal value or principal sum shall be taken in those accounts to be accumulated realised profits.
(4) In subsection (3) above “staturory accounts of a company” means any accounts prepared by the company for the purpose of any provision of the [1985 c. 6.] Companies Act 1985 (including group accounts).
(5) The Secretary of State shall not—
(a) make an order under subsection (1) above extinguishing the liability of any company; or
(b) give a direction under subsection (2) above for the issue of securities,
except at a time when the company whose liability is extinguished by the order or, as the case may be, the company which is directed to issue securities is wholly owned by the Crown; and he shall not give a direction under paragraph (c) of the said subsection (2) except at a time when the company or companies to whom the securities are to be issued is, or are, so owned.
(6) Except as may be agreed between the Secretary of State and a company which is directed to issue debentures in pursuance of this section—
(a) the aggregate of the principal sums payable under the debentures to which the direction relates shall be equal to the aggregate of the sums the liability to repay which is extinguished by the order; and
(b) the terms as to the payment of the principal sums payable on the debentures to which the direction relates, and as to the payment of interest thereon, shall be the same as the corresponding terms of the loans specified in the order.
(7) For the purposes of subsection (6) above any express or implied terms of a loan shall be disregarded in so far as they relate to the early discharge of liabilities to make repayments of principal and payments of interest.
(8) Subsections (3) to (6) of section 71 above shall apply for the purposes of this section as they apply for the purposes of that section.
(9) In this section “relevant loan”, in relation to a successor company in Scotland, means—
(a) any loan made, or deemed to have been made, by the Secretary of State or from the National Loans Fund the liability to repay which vests in that company by virtue of section 67(4) above;
(b) any loan made to that company by the Secretary of State under section 78 above; and
(c) any sums payable under debentures issued as a consequence of the making of an order under this section.
(10) In this section and section 81 below “successor company in Scotland” means a company nominated for the purposes of section 67(1) above.
Electricity Act 1989