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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _____to_____
Commission Registrant, State of Incorporation, I.R.S. Employer
File Number Address and Telephone Number Identification No.
---------- ----------------------------------- ------------------
333-09033 Southern Investments UK plc None
(Registered in England & Wales)
800 Park Avenue
Aztec West
Almondsbury
Bristol
BS32 4SE, UK
(01144) 1454 201101
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No __
Description of Shares Outstanding
Registrant Common Stock at October 31, 1999
- ---------- -------------- -------------------
Southern Investments UK plc Par Value(pound)1 Per Share 902,128,735
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q includes forward-looking statements in
addition to historical information. The Company cautions that there are various
important factors that could cause actual results to differ materially from
those indicated in the forward-looking statements; accordingly, there can be no
assurance that such indicated results will be realized. These factors include
legislative and regulatory initiatives regarding the current review of
regulation, and the results of the distribution price review scheduled to take
effect April 1, 2000; challenges related to Year 2000 readiness; potential
business strategies, including acquisitions or dispositions of assets or
internal restructuring that may be pursued by the Company or its subsidiaries;
the potential introduction of the Euro; changes in or application of
environmental and other laws and regulations to which the Company and its
subsidiaries are subject; political, legal and economic conditions and
developments in which the Company and its subsidiaries operate; financial market
conditions and the results of financing efforts; changes in commodity prices and
interest rates; weather and other natural phenomena; the performance of projects
undertaken by the Company or its subsidiaries and the success of efforts to
invest in and develop new opportunities; and other factors discussed elsewhere
herein and in other reports (including Form 10-K) filed from time to time by the
Company with the SEC.
<PAGE>
<TABLE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Stated in Millions)
<CAPTION>
For the Three Months Ended September 30,
----------------------------------------
1999 1998
---- ----
(Note A)
<S> <C> <C> <C>
OPERATING REVENUES (pound) 70 $ 115 (pound) 58
COST OF SALES 6 10 2
------ ------ ------
GROSS MARGIN 64 105 56
------ ------ ------
OPERATING EXPENSES:
Maintenance 10 16 9
Depreciation and amortization 13 21 13
Selling, general, and administrative 11 18 8
Incremental expenses incurred as a direct consequence
of the disposal of the supply business (Note D) 1 2 -
------ ------ ------
Total operating expenses 35 57 30
------ ------ ------
OPERATING INCOME 29 48 26
------ ------ ------
OTHER INCOME (EXPENSE):
Interest income from affiliated company 5 8 -
Interest expense (13) (21) (14)
Other, net 3 5 1
------ ------ ------
Total other income (expense) (5) (8) (13)
------ ------ ------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 24 40 13
INCOME TAXES:
Customary (7) (12) (3)
Effect of change in tax rate (Note K) - - 11
------ ------ ------
INCOME FROM CONTINUING OPERATIONS 17 28 21
DISCONTINUED OPERATIONS:
Income from operations of discontinued supply business
(less applicable income taxes of(pound)3 ($5), and(pound)1) 4 7 2
Gain on disposal of supply business (less applicable
income taxes of(pound)48 ($79)) (Note D) 124 204 -
------ ------ ------
NET INCOME (pound) 145 $ 239 (pound) 23
====== ====== ======
The accompanying notes form an integral part of these condensed consolidated statements
</TABLE>
2
<PAGE>
<TABLE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Stated in Millions)
<CAPTION>
For the Six Months Ended September 30,
--------------------------------------
1999 1998
---- ----
(Note A)
<S> <C> <C> <C>
OPERATING REVENUES (pound) 129 $ 212 (pound) 120
COST OF SALES 9 15 6
------ ------ ------
GROSS MARGIN 120 197 114
------ ------ ------
OPERATING EXPENSES:
Maintenance 18 29 17
Depreciation and amortization 26 43 25
Selling, general, and administrative 19 31 18
Incremental expenses incurred as a direct consequence
of the disposal of the supply business (Note D) 1 2 -
------ ------ ------
Total operating expenses 64 105 60
------ ------ ------
OPERATING INCOME 56 92 54
------ ------ ------
OTHER INCOME (EXPENSE):
Interest income from affiliated company 10 16 -
Interest expense (27) (44) (28)
Gain on sale of assets - - 7
Other, net 5 8 2
------ ------ ------
Total other income (expense) (12) (20) (19)
------ ------ ------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 44 72 35
INCOME TAXES:
Customary (13) (21) (11)
Effect of change in tax rate (Note K) - - 11
------ ------ ------
INCOME FROM CONTINUING OPERATIONS 31 51 35
DISCONTINUED OPERATIONS:
Income from operations of discontinued supply business
(less applicable income taxes of(pound)3 ($7), and(pound)2) 4 7 4
Gain on disposal of supply business (less applicable income
taxes of(pound)48 ($79)) (Note D) 124 204 -
------ ------ ------
NET INCOME (pound) 159 $ 262 (pound) 39
====== ====== ======
The accompanying notes form an integral part of these condensed consolidated statements
</TABLE>
3
<PAGE>
<TABLE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Stated in Millions)
<CAPTION>
For the Six Months Ended September 30,
--------------------------------------
1999 1998
---- ----
(Note A)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (pound) 159 $ 262 (pound) 39
Adjustments to reconcile net income to net cash provided by
operating activities from continuing operations:
Income from operations of discontinued supply business (4) (7) (4)
Gain on disposal of supply business (Note D) (124) (204) -
Depreciation and amortization 26 43 25
Deferred income taxes 3 5 (9)
Gain on sale of assets - - (7)
Changes in certain current assets and liabilities:
Receivables, net (22) (36) 2
Accounts payable 35 57 20
Accrued income taxes 16 26 10
Other (8) (13) (5)
------ ------ ------
Net cash provided from operating activities of continuing
operations 81 133 71
------ ------ ------
INVESTING ACTIVITIES:
Capital expenditures (31) (51) (33)
Proceeds from sale of supply business (Note D) 160 263 -
Proceeds from sale of assets - - 10
Proceeds from sale of investments 4 7 -
------ ------ ------
Net cash provided from (used for) investing activities of
continuing operations 133 219 (23)
------ ------ ------
FINANCING ACTIVITIES:
Payments of common stock dividends (24) (39) (20)
Change in short-term borrowings (73) (120) (43)
------ ------ ------
Net cash used for financing activities of continuing operations (97) (159) (63)
------ ------ ------
CASH PROVIDED BY DISCONTINUED OPERATIONS 20 33 17
------ ------ ------
NET INCREASE IN CASH AND CASH EQUIVALENTS 137 226 2
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 5 8 5
------ ------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD (pound) 142 $ 234 (pound) 7
====== ====== ======
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest (net of amount capitalized) (pound) 26 $ 43 (pound) 27
Income taxes (pound) (3) $ (5) (pound) -
The accompanying notes form an integral part of these condensed consolidated statements.
</TABLE>
4
<PAGE>
<TABLE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in Millions)
ASSETS
<CAPTION>
At September 30, 1999 At March
--------------------- --------
(Unaudited) 31, 1999
---------- --------
(Note A)
<S> <C> <C> <C>
PROPERTY, PLANT, AND EQUIPMENT (pound) 1,439 $2,368 (pound) 1,452
Less accumulated depreciation 160 263 151
------ ------ ------
Total 1,279 2,105 1,301
------ ------ ------
OTHER ASSETS:
Investments 15 25 16
Prepaid pension cost 135 222 134
Goodwill, net of accumulated amortization of (pound)18 ($30) at
September 30, 1999 and(pound)16 at March 31, 1999 165 271 167
Loans to affiliated company 351 578 351
Premium in respect of loans to affiliated company and related
hedges, net of accumulated amortization of (pound)7 ($12) at September
30, 1999 and (pound)3 at March 31, 1999 35 58 39
------ ------ ------
Total 701 1,154 707
------ ------ ------
CURRENT ASSETS:
Cash and cash equivalents 142 234 5
Investments 14 23 15
Receivables:
Customer accounts, less provision for uncollectables of (pound)3 ($5) at
September 30, 1999 and(pound)10 at March 31, 1999 26 43 80
Other 16 26 17
Materials and supplies 2 3 3
Prepayments 17 28 11
------ ------ ------
Total 217 357 131
------ ------ ------
TOTAL ASSETS (pound) 2,197 $3,616 (pound) 2,139
====== ====== ======
The accompanying notes are an integral part of these condensed consolidated balance sheets.
</TABLE>
5
<PAGE>
<TABLE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in Millions)
STOCKHOLDER'S EQUITY AND LIABILITIES
<CAPTION>
At September 30, 1999 At March
--------------------- --------
(Unaudited) 31, 1999
----------- --------
(Note A)
<S> <C> <C> <C>
STOCKHOLDER'S EQUITY:
Common stock, par value(pound)1 per share, 902,128,735 shares
authorized, issued and outstanding (pound) 902 $1,484 (pound) 902
Retained deficit (Note E) (11) (18) (146)
------ ------ ------
Total 891 1,466 756
------ ------ ------
COMPANY OBLIGATED MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SOUTHERN INVESTMENTS
UK CAPITAL TRUST I HOLDING COMPANY JUNIOR
SUBORDINATED DEBENTURES 50 82 50
NON-CURRENT LIABILITIES:
Long-term debt 301 495 301
Accumulated deferred income taxes 411 677 363
Provision for loss contracts (Note F) - - 69
Miscellaneous 41 68 36
------ ------ ------
Total 753 1,240 769
------ ------ ------
CURRENT LIABILITIES:
Commercial paper - - 94
Notes payable to banks 276 454 273
Notes payable to affiliated company 43 71 25
Other notes payable 7 12 7
Accounts payable 7 12 44
Accrued income taxes 67 110 48
Interest accrued 10 16 9
Miscellaneous 93 153 64
------ ------ ------
Total 503 828 564
------ ------ ------
TOTAL STOCKHOLDER'S EQUITY AND LIABILITIES (pound) 2,197 $3,616 (pound) 2,139
====== ====== ======
The accompanying notes are an integral part of these condensed consolidated balance sheets.
</TABLE>
6
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999
(Unaudited)
(A) Solely for the convenience of the reader, certain pounds sterling amounts
included in the condensed consolidated financial statements have been
translated into US dollars at the exchange rate of $1.6457 = (pound)1.00,
the noon buying rate in New York City for cable transfers in pounds
sterling as certified for customs purposes by the Federal Reserve Bank of
New York on September 30, 1999.
(B) The condensed consolidated financial statements included herein have been
prepared pursuant to the rules and regulations of the SEC and in
conformity with accounting principles generally accepted in the United
States. In the opinion of the Company's management, the information
furnished herein reflects all adjustments necessary to present fairly the
results of the three-month and six-month periods ended September 30,
1999 and 1998. All such adjustments are of a normal recurring nature.
The Company's fiscal year-end is March 31. Certain information and
footnote disclosures normally included in consolidated financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are
adequate to make the information presented not misleading. It is
suggested that these condensed consolidated financial statements be read
in conjunction with the financial statements and the notes thereto
included in the Company's latest annual report on Form 10-K.
The condensed consolidated financial statements included herein have been
reviewed by the Company's independent public accountants as set forth in
their report included herein as Exhibit 15.
(C) The Company has adopted Financial Accounting Standards Board ("FASB")
Statement No. 130, "Reporting Comprehensive Income". This statement
establishes rules for the reporting and display of comprehensive income
and its components. The objective of the statement is to report a measure
of all changes in common stock equity of an enterprise that result from
transactions and other economic events of the period other than
transactions with owners. There were no items for inclusion in a
consolidated statement of comprehensive income other than net income as
shown on the condensed consolidated statements of income. Consequently,
a consolidated statement of comprehensive income has not been included.
(D) The Company holds the entire share capital of South Western Electricity
plc ("SWE").
On September 30, 1999, SWE completed the sale of its supply business (and
certain related activities) to London Electricity plc ("LE"). Under the
terms of the agreement, SWE received cash consideration of (pound)160
million, and transferred certain liabilities to LE.
Prior to the sale, SWE was primarily engaged in two distinct electricity
businesses, distribution, which involves the transfer of electricity from
the high voltage transmission system, and its delivery, across lower
voltage distribution systems, to consumers; and supply, which involves a
wholesale energy procurement function and a retail energy sales, service
and billing function.
Proceeds from the sale were utilized to reduce short-term debt ((pound)
20 million) and the remainder ((pound)140 million) temporarily
placed on deposit.
SWE's operating income is predominantly from the distribution business
and this will continue now that the sale of the supply business has been
completed.
SWE will brand its distribution business as Western Power Distribution as
the SWEB name has transferred to LE.
7
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The supply business segment has been accounted for as a discontinued
operation, and accordingly, amounts in the financial statements and
related notes for all periods shown have been restated.
There are certain incremental costs relating to the ongoing business
which are a direct consequence of the sale of the supply business and
related activities to LE. These costs principally involve the
establishment of a new computer environment and data migration and will
be charged to operating expenses. These costs are estimated at (pound)
11 million in total and will be substantially incurred in the third
quarter.
(E) The Company shows a retained earnings deficit primarily due to dividends
in the amount of (pound)191 million being declared and paid by the
Company during the fiscal year 1996 as proceeds from the sale of SWE's
shares in The National Grid Group plc provided cash in addition to that
provided from operations. In addition, the first budget of the Labour
government included a "one-off windfall levy on the excess profits of the
privatized utilities"; SWE's liability was assessed at (pound)90 million
during fiscal year 1998.
(F) SWE entered into a contract relating to the purchase of 200 megawatts of
capacity from a 7.69% owned related party, Teesside Power Limited
("Teesside"), for a period of 15 years beginning April 1993. The contract
sets escalating electricity purchase prices at predetermined levels. The
Company recognized an accrual at the acquisition date for the excess of
these Teesside power purchase costs in each year over an estimate of the
equivalent Pool costs in that respective year. Under the terms of the
supply sale agreement, LE has assumed SWE's obligations under the
contract and therefore the accrual was released and is included within
the gain on sale.
(G) The Company engages in price risk management activities. Reference is
made to MANAGEMENT'S DISCUSSION AND ANALYSIS "Derivative Financial
Instruments" and Note 7 to the financial statements of the Company in
Item 8 of Form 10-K for a discussion of these activities. Activities for
non-trading purposes consist of transactions employed to mitigate the
Company's risk related to interest rates and foreign currency exchange
rate fluctuations. At September 30, 1999, the status of outstanding
non-trading related derivative contracts was as follows:
(i) Interest rate swaps expiring between 2001 and 2012 with notional
amounts totaling(pound)600 million, resulted in an unrealized
loss of(pound)29 million.
(ii) Currency swaps expiring between 2001 and 2007 with notional amounts
totaling(pound)350 million, resulted in an unrealized gain of
(pound)3 million.
The above excluded swap agreements between the Company and an affiliated
company Holdings UK.
(H) The principal business segment is the distribution business. This
involves the transfer of electricity from the high voltage transmission
system, and its delivery, across lower voltage distribution systems, to
consumers.
8
<PAGE>
<TABLE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<CAPTION>
Financial data for business segments for the periods covered in the Form
10-Q are as follows:
Distribution Other Eliminations Consolidated
------------ ----- ------------ ------------
(in millions)
<S> <C> <C> <C> <C>
Three Months Ended September 30, 1999:
-------------------------------------
Operating revenues (pound) 54 (pound) 22 (pound) (6) (pound) 70
Segment operating income 18 11 - 29
Six Months Ended September 30, 1999:
------------------------------------
Operating revenues (pound) 107 (pound) 35 (pound) (13) (pound) 129
Segment operating income 38 18 - 56
Total assets at September 30, 1999 (pound)1,585 (pound) 612 (pound) - (pound) 2,197
Three Months Ended September 30, 1998:
--------------------------------------
Operating revenues (pound) 55 (pound) 14 (pound) (11) (pound) 58
Segment operating income 23 3 - 26
Six Months Ended September 30, 1998:
------------------------------------
Operating revenues (pound) 110 (pound) 28 (pound) (18) (pound) 120
Segment operating income 46 8 - 54
Total assets at March 31, 1999 (pound)1,599 (pound)540 (pound) - (pound) 2,139
</TABLE>
The "Other" category includes ancillary business activities that
generally support SWE's distribution business, including electricity
generation for standby purposes, property and telecommunications, as well
as corporate items and assets not allocated to specific segments and
energy purchasing. Interest expense and taxes are wholly allocated to
"Other" and are disclosed in the Condensed Consolidated Statements of
Income. With the exception of total assets at March 31, 1999, the values
above exclude discontinued operations.
(I) The Company and SWE are routinely party to legal proceedings arising in
the ordinary course of business which are not material, either
individually or in aggregate. Neither the Company nor SWE is a party to
any material legal proceedings nor are they currently aware of any
threatened material legal proceedings.
Reference is made to Note 2 to the financial statements of the Company in
Item 8 of the Form 10-K for information regarding complaints made by
members of the Electricity Supply Pension Scheme ("ESPS") relating to the
use by another employer, The National Grid Company plc ("NGC"), of ESPS
surplus to offset that employer's costs of providing early pensions on
redundancies and certain other items. NGC, together with National Power
PLC, have now initiated appeals in the House of Lords. NGC and National
Power PLC have executed deeds of amendment which purport to cancel their
accrued contribution obligations arising from the Court of Appeal's
judgment. The House of Lords is unlikely to rule whether such amendments
are effective before December 2000. SWE is considering whether to execute
similar amendments.
9
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(J) The condensed consolidated financial statements included herein have not
been prepared in accordance with the policies of Statement of Financial
Accounting Standards No. 71 "Accounting for the Effects of Certain
Types of Regulation" ("SFAS No. 71"). This pronouncement, under which
most US electric utilities report financial statements, applies to
entities which are subject to cost-based rate regulation. By contrast,
SWE is not subject to rate regulation, but rather, is subject to price
cap regulation and therefore the provisions of SFAS No. 71 do not
apply. Financial statements presented in accordance with SFAS No. 71
often contain certain deferred items which have not been included in
rates charged to customers in compliance with the respective regulatory
authority rulings, but which would have been included in the income
statement of enterprises in general under US GAAP. The accompanying
consolidated financial statements of the Company do not contain such
deferrals.
(K) The UK government's 1998 Finance Act included a reduction in the rate of
UK corporation tax from 31% to 30% effective April 1999. The decrease
resulted in a reduction to SWE's provision for deferred income taxes and
a corresponding decrease in income tax expense of approximately (pound)11
million.
10
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
SECOND QUARTER OF FISCAL YEAR 2000 vs. SECOND QUARTER OF FISCAL YEAR 1999
AND
FISCAL YEAR-TO-DATE 2000 vs. FISCAL YEAR-TO-DATE 1999
RESULTS OF OPERATIONS
Earnings
On September 30, 1999, SWE completed the sale of its supply business (and
certain related activities) to LE. Reference is made to Note D in the "Notes to
the Consolidated Financial Statements" herein. The Consolidated Statements of
Income for all periods shown have been restated to reflect discontinued
operations accounting for this business segment. Net income from discontinued
operations for fiscal year 2000 includes an anticipated gain on the sale of
(pound)124 million; certain items are subject to finalization including the
value of working capital and pension asset to be transferred.
The Company's net income from continuing operations for the second
quarter and year-to-date of fiscal year 2000 was (pound)17 million and (pound)31
million, respectively, compared to (pound)21 million and (pound)35 million for
the corresponding period of fiscal year 1999.
Excluding the effect of a change in the tax rate on deferred income
taxes (Note K), significant income statement items from continuing operations
appropriate for discussion include the following:
<TABLE>
<CAPTION>
Increase (Decrease)
----------------------------------------------------
Second Quarter Year-To-Date
(in millions) % (in millions) %
<S> <C> <C> <C> <C>
Operating revenues................................... (pound) 12 21 (pound) 9 8
Interest income from affiliated Company.............. 5 - 10 -
Gain on sale of assets............................... - - (7) (100)
Income taxes - customary ............................ 4 133 2 18
</TABLE>
Operating revenues. Within operating revenues, the distribution business
decreased by (pound)1 million for the quarter and by (pound)3 million
year-to-date when compared to the same period of fiscal year 1999. Revenues
from ancillary businesses (net of eliminations) for the second quarter and
year-to-date of fiscal year 2000 increased by (pound)13 million and
(pound)12 million respectively, compared to the same period of fiscal year 1999.
Interest income from affiliated company. The second quarter and year-to-date
increase is due to interest receivable on three long-term loans (totaling
(pound)351 million) made to an affiliated company in December 1998. Reference is
made to Note 9 to the financial statements of the Company in Item 8 of the Form
10-K for information relating to capital restructuring.
Gain on sale of assets. The year-to-date decrease is attributed to the gain on
the disposition of certain non-core assets in the corresponding period of fiscal
year 1999.
Income taxes. The second quarter and year-to-date increase is primarily
attributed to higher income before tax, partly offset by a reduction in the UK
corporation tax rate from 31% in fiscal year 1999 to 30% in fiscal year 2000.
11
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Future Earnings Potential
The results of operations discussed above are not necessarily indicative
of future earnings potential. The level of future earnings depends on numerous
factors including review of regulation and the outcome of current and future
distribution price reviews.
The largest portion of SWE's operating income is derived from its
distribution business - the operation and maintenance of the electricity
distribution network in its Authorized Area in the southwest of England. SWE is
the only distributor of electricity in this area, and management believes that
economic, environmental and regulatory factors are likely to prevent competitors
from entering this business in SWE's Authorized Area.
Distribution revenues are subject to price cap regulation. The Regulator
applies a price control formula ("DPCF"), P + RPI -X, where P is the price level
at the beginning of each new regulatory period, RPI is the change in the Retail
Price Index and X is an adjustment factor determined by the Regulator. X is
currently 3% for SWE. The DPCF is usually set for a five-year period, subject to
more frequent adjustments as determined necessary by the Regulator. At each
review, the Regulator can require a one-time price adjustment.
In August 1999, the Regulator published draft price proposals following
his current review of the DPCF for the 14 regional electricity distribution
businesses. These proposals stated that SWE should reduce its distribution
prices from April 1, 2000 by a percentage within the range 21% to 26% followed
by a reduction in real terms of 3% each year from April 1, 2001. This price
control will operate until March 2005. In October, the Regulator proposed that
the range be revised to 19% to 24%, which includes an allowance to reflect SWE's
improved quality of supply performance. Discussions continue and the Regulator's
final decision is expected in November. Management is in the process of
identifying opportunities to reduce ongoing operating costs.
Reference is made to MANAGEMENT'S DISCUSSION AND ANALYSIS - "Future
Earnings Potential" of Form 10-K for details of the Regulator's proposals and
consultation on the regulation of the water, electricity, gas and
telecommunications utilities within the UK. As these papers are only
consultative at this time, it is not possible for the Company to determine the
impact, if any, on the distribution and generation businesses, until after such
issues have been finalized by the government, and firm proposals are made by the
Regulator.
The FASB issued Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities", which was originally to be adopted by the Year 2000.
This statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. In June 1999, the FASB issued Statement
No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133", which amends FASB
Statement No. 133 to be effective for all fiscal years beginning after June 15,
2000. The Company has not yet quantified the impact of adopting this statement
on its financial statements; however, the adoption could increase volatility in
earnings and other comprehensive income.
12
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In January 1999, eleven European Union countries formed an economic and
monetary union and started using a single currency the Euro. The UK did not join
at this time, but the UK government has indicated that it might in the future.
SWE is currently assessing the changes to financial systems that would be
required if the Euro is introduced to the UK. The cost of conversion to Euro
compatible systems could have a significant impact on future earnings.
Reference is made to Note (I) in the "Notes to the Condensed Financial
Statements" herein for discussion of various contingencies and other matters
which may affect future earnings potential. Reference is also made to Part II -
Item 1 - "Legal Proceedings" herein.
YEAR 2000 READINESS
Year 2000 Challenge
In order to save storage space, computer programmers in the 1960s and
1970s shortened the year portion of date entries to two digits. Computers
assumed, in effect, that all years began with "19". This practice was widely
adopted and hard-coded into computer chips and processors found in some
equipment. This approach, intended to save processing time and storage space
within computers, was used until the mid-1990s. Unless corrected before the Year
2000, affected software systems and devices containing a chip or microprocessor
with date and time functions could incorrectly process dates or the systems may
cease to function.
SWE depends on complex computer systems for many aspects of its
operations, which is primarily the distribution of electricity, as well as other
business support activities. SWE has met its goal to have critical devices or
software that are required to maintain operations Year 2000 ready by June 1999.
Year 2000 ready means that a system or application is determined suitable for
continued use through the Year 2000 and beyond. Critical systems include, but
are not limited to, control center computer systems, customer service systems,
and telephone switches and equipment.
Year 2000 Program and Status
SWE's executive management recognizes the seriousness of the Year 2000
challenge and has dedicated what it believes to be adequate resources to address
the issue. An executive steering committee reviews Millennium Project progress
on a regular basis, and Southern receives periodic updates and progress reports.
SWE's Millennium Project is divided into two phases. Phase one began in
1996 and consisted of identifying and assessing corporate assets related to
software systems and devices that contain a computer chip or clock. The first
phase was completed in July 1997. Phase two consisted of testing and remediating
high priority systems and devices. Also, contingency planning is included in
this phase. The end of June 1999 target for phase two was met with the exception
of the remediation of a very small number of systems where SWE has third party
dependencies; implementation of these was complete by the end of October 1999.
The Millennium Project will continue to monitor the affected computer systems,
devices, and applications into the Year 2000.
13
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Year 2000 Costs
Current projected costs of SWE's Year 2000 readiness are approximately
(pound)13 million. These costs include labor necessary to identify, test and
renovate affected devices and systems. From its inception through September 30,
1999, the Year 2000 program costs amounted to (pound)13 million.
Year 2000 Risks
SWE has followed a proven methodology for identifying and assessing
software and devices containing potential Year 2000 challenges. SWE believes,
based on current tests, that the system can provide customers with electricity.
These tests increase confidence, but do not guarantee error-free operations. SWE
is taking what it believes to be prudent steps to prepare for the Year 2000, and
it expects any interruptions in service that may occur to be isolated and short
in duration.
The industry's Regulator, in liaison with independent assessors, has
stated that he has not identified any risks of material disruption to the
infrastructure process for SWE, and has rated the Company 100% compliant, as
measured by the Regulator.
SWE has reviewed the Year 2000 readiness of material third parties which
provide goods and services crucial to SWE's operations. Among such critical
third parties are the NGG, telecommunications, water, and other suppliers. There
is some risk associated with representations by third parties regarding their
readiness and completion of their own Year 2000 related work. Contingency plans
based on the assessment of each third party's ability to continue supplying
critical goods and services to SWE are being developed.
There is a potential for some earnings erosion caused by reduced
electrical demand by customers because of their Year 2000 issues.
Year 2000 Contingency Plans
SWE is skilled at using contingency plans in unusual circumstances
because of experience with storms. As part of Year 2000 business continuity and
contingency planning, SWE is drawing on that experience to make risk assessments
and is developing additional plans to deal specifically with situations that
could arise relative to Year 2000 challenges. SWE is identifying critical
operational locations, and key employees will be on duty at those locations
during the Year 2000 transition. In September 1999, drills were successfully
conducted to test contingency plans. Because of the level of detail of the
contingency planning process, management feels that the contingency plans will
keep any service interruptions that may occur isolated and short in duration.
SWE is participating with the rest of the UK Electricity Industry and
also with other utilities (water, telecommunications and gas) through the Year
2000 Utilities Interest Group where the focus now is very much on contingency
planning.
The material in this section constitutes forward looking statements made
pursuant to the Private Securities Litigation Reform Act of 1995. There can be
no assurance that the actual results of the Company, its suppliers, or other
third party dependencies will not materially differ from expectations.
14
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
FINANCIAL CONDITION
Overview
The major change in the Company's financial condition during the six
months to September 30, 1999 related to the sale of the supply business as
discussed elsewhere in this document. In addition SWE expended approximately
(pound)31 million in property, plant, and equipment, largely in respect of the
distribution network. The funds required for such additions were derived
primarily from operations. It is expected that SWE's capital requirements in the
foreseeable future for its investment in property, plant, and equipment will be
generated from operating activities.
Demand for electricity in Great Britain, in general, and in SWE's
Authorized Area, in particular, is seasonal, with demand being higher in the
winter months and lower in the summer months. SWE balances the effect of this
and other cyclical influences on its working capital needs with drawings under
its available credit facilities.
The Company holds the entire share capital of SWE. The Company is
primarily dependent upon dividends from SWE for its cash flow. SWE can make
distribution of dividends to the Company under English law to the extent that it
has distributable reserves, subject to the retention of sufficient financial
resources to conduct its distribution business as required by its regulatory
license. The Company believes that currently sufficient distributable reserves
will continue to exist at SWE to allow for reasonable and necessary dividends
from SWE, through operations, to be distributed to the Company. In the UK, the
Accounting Standards Board is currently reviewing the treatment of deferred
income tax accounting. If full provision for deferred tax were required, SWE's
distributable reserves could be eliminated. In addition, in September 1999, the
Regulator varied the licenses under which all RECs (including SWE) operate such
that the directors of a REC must certify to the Regulator that it is reasonably
foreseeable that the REC will not breach any of its license conditions if it
declares a dividend. SWE has no reason to believe that a breach of its license
would flow from declaring a reasonable dividend.
Financing Activities
The Company has a US commercial paper program, which is fully supported
by a swingline and revolving credit facility provided by a syndicate of banks,
under which the maximum available is $520 million. At September 30, 1999 the
amount unutilized under these facilities was $191 million. SWE enters into
foreign currency contracts to hedge the currency risk associated with the
interest and principal of each utilization under this program.
SWE actively manages its short-term debt, which includes a number of bank
lines of credit in addition to the commercial paper program. At September 30,
1999 the Company and SWE together had short-term debt of (pound)326 million
($537 million) outstanding ($329 million from a swingline and revolving credit
facility, and $208 million in other short-term loans).
To meet short-term cash needs and contingencies, the Company and SWE
together had at September 30, 1999 approximately (pound)2 million of cash and
(pound)55 million of unutilized committed lines of credit with banks. Also
available was $191 million of the swingline and revolving credit facility
mentioned above. It also had (pound)140 million on short term cash deposit being
part of the proceeds from the sale of the supply business.
15
<PAGE>
SOUTHERN INVESTMENTS UK plc and SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Excluding swap agreements between the Company and Holdings UK, at
September 30, 1999, the Company and SWE have sterling interest rate swaps
expiring between 2001 and 2012, with notional amounts totaling (pound)600
million, and have cross currency swaps expiring between 2001 and 2007, with
notional amounts totaling (pound)350 million.
16
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
(1) Reference is made to the Notes to the Consolidated Financial Statements
herein for information regarding certain legal and administrative
proceedings in which the Company is involved.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
--------
Exhibit 10 - SWEB Public Electricity Supply License dated September
30, 1999, which supersedes Exhibits 10.1 and 10.2, as
designated in Form 10-K for the year ended March 31, 1999.
Exhibit 15 - Report of Independent Public Accountants
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K.
-------------------
The Company filed a Current Report on Form 8-K dated September 30, 1999:
Items reported: Item 2
Item 7
Financial statements filed: Yes
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SOUTHERN INVESTMENTS UK plc
/s/W. P. Bowers
By W. P. Bowers
Director
/s/ D. C. S. Oosthuizen
By D. C. S. Oosthuizen
Director, Chief Financial and Accounting Officer
Date: November 12, 1999
Exhibit 10.2
PUBLIC ELECTRICITY
SUPPLY LICENCE
for
SOUTH WESTERN ELECTRICITY plc
<PAGE>
PREFACE
1. This document illustrates the licence obligations which presently apply
under the Public Electricity Supply Licence held by South Western
Electricity plc. The document comprises conditions contained in the
original Licence granted on 26 March 1990 and subsequent modifications
made to that Licence.
2. OFFER wishes to make clear that this is not legally binding document
but has been produced as a working copy of South Western Electricity
plc's PES licence. It is hoped that this document accurately reflects
the present Licence, but it is not a substitute for the original
Licence and the subsequent schedules of modifications issued to South
Western Electricity plc and held by OFFER's library.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
PART I. TERMS OF THE LICENCE 1
PART II. THE CONDITIONS 2
INTERPRETATION 2
1. Definitions and interpretation 2
SECTION A. DISTRIBUTION BUSINESS OBLIGATIONS 22
2. Availability of Distribution Business resources 22
3. Distribution Charge restriction conditions: definitions 24
3A. Restriction of distribution charges 30
3B. Restriction of distribution charges: adjustments 39
3C. Information to be provided to the Director in connection with the distribution
charge restriction conditions 54
3D. Distribution Business allowance in respect of security costs 59
3E. Duration of distribution charge restriction conditions 63
4. Prohibition of cross-subsidies 65
5. Basis of charges for use of system, connection to system and Metering and
Data Services: requirements for transparency 66
5A. Non-discrimination in the provision of use of system, connection to system
and Metering and Data Services 73
5B. Requirement to offer terms for use of system, connection and the provision
of Metering and Data Services 75
5C. Requirement to offer Standard Terms of Connection 82
5D. Functions of the Director 84
6. Distribution system planning standard and quality of service 86
7. Security and Safety of Supplies Enquiry Service 87
8. Provision of information about theft, damage and meter interference 89
9. Provisions relating to the connection of metering equipment 90
10. Generation Security Standard 92
11. Distribution Code 95
<PAGE>
12. The Metering Point Administration Service and the Master Registration
Agreement 99
13. Establishment of a Data Transfer Service 103
14. Restriction on use of certain information and independence of the
Distribution Business 107
14A. Appointment of Compliance Officer 113
15. Requirement to facilitate competition in the Generation and Supply of
Electricity 117
16. Compliance with the Grid Code 118
17. Security arrangements 119
18. Conditions affecting customers'statutory rights 120
19. Licensee's apparatus on customers'side of meter 122
20. Provision of distribution services for persons who are of pensionable age or
disabled or chronically sick 123
21. Code of practice on procedures with respect to site access 125
22. Standards of performance for the Distribution Business 126
23. Distribution Business complaint handling procedure 127
24. Preparation, review of and compliance with customer service codes 128
25. Record of and report on Distribution Business performance 130
26. Publication of supply numbers 132
27. Relations with the Relevant Consumers'Committee 133
28. Health and safety of employees 134
SECTION B. SUPPLY BUSINESS OBLIGATIONS 135
Sub-Section (1) General Obligations 135
29. Supply charge restriction conditions: definitions 135
29A. Restriction on Supply Charges 140
29B. Restriction of supply charges: adjustments 149
29C. Information to be provided to the Director in connection with the supply
charge restriction conditions 201
29D. Supply Business allowance in respect of security costs 205
29E. Duration of supply charge restriction conditions 209
30. Prohibition of cross-subsidies and of discrimination in electricity sale
contracts 211
<PAGE>
31. Prohibition of discrimination in supply 212
31A. Duration of discrimination conditions 218
32. Obligation on economic purchasing 220
33. Tariffs 223
34. Arrangements for informing customers on revocation of Licence 224
35. Basis of charges for top-up and standby supplies or sales of electricity,
exempt supply services and prepayment meter services:
requirements for transparency 226
35A. Non-discrimination in the provision of top-up or standby supplies or sales of
electricity, exempt supply services and prepayment meter services 229
35B. Requirement to offer terms for top-up and standby, exempt supply services
and prepayment meter services 231
35C. Arrangements in respect of Standard Terms of Connection 235
35D. Functions of the Director 236
36. Provision of information to customers about security and safety of
supplies 238
37. Procedures for the detection and prevention of theft, damage and meter
interference 240
38. Agreements for the provision of meters 241
39. Generation Security Standard 242
40. The Master Registration Agreement 245
41. Restriction on use of certain information 246
42. Compliance with the Grid Code 247
43. Security arrangements 248
44. Pooling and Settlement Agreement 249
45. Conditions of supply affecting customers'statutory rights 250
46. Code of practice on payment of bills and guidance for dealing with
customers in difficulty 251
47. Provision of supply services for persons who are of pensionable age or
disabled or chronically sick 253
48. Code of practice on procedures with respect to site access 255
49. Supply Business standards of performance 256
50. Efficient use of electricity 257
51. Supply Business complaint handling procedure 259
<PAGE>
52. Preparation, review of and compliance with customer service codes 260
53. Record of and report on Supply Business performance 262
54. Information given to Designated Customers 264
55. Publication of information to customers 265
56. Relations with the Relevant Consumers'Committee 266
57. Health and safety of employees 267
58. Designated Premises 268
59. Terms for supply of electricity incompatible with Licence Conditions 270
60. Limitation on requirements for termination fees 271
61. Revision of the Contract Terms Conditions 272
Sub-Section (2) The Contract Terms Conditions 276
62. Designated Supply Contracts 276
63. Contractual terms 278
64. Notification of terms 280
65. Security deposits 282
66. Termination of contracts on notice 284
67. Termination of contracts in specified circumstances 286
68. Assignment of outstanding charges 288
69. Modification of provisions under Conditions 66 and 68 290
70. Marketing of electricity to Designated Customers 292
SECTION C. COMMON OBLIGATIONS 298
71. Separate accounts for Separate Businesses 298
72. Restriction on activity and financial ring fencing 304
73. Availability of resources 307
74. Credit rating of Licensee 311
75. Restriction on own generation capacity 312
76. Restrictions relating to Embedded Generation 319
77. Disposal of relevant assets 320
78. Provision of information to the Director 325
79. Payment of fees 327
80. Arrangements for provision of services by the Agent 329
<PAGE>
Schedule 1. Description of authorised area 331
Schedule 2. Terms as to revocation 333
Schedule 3A. Supplementary provisions of the distribution charge restriction conditions 336
Part A. Principles for Attribution 336
Part B. EHV premises 338
Part C. Excluded services 339
Part D. Regulated distribution unit categories 343
Part E. Calculation of factor in respect of distribution losses 346
Schedule 3B. Supplementary provisions of the supply charge restriction conditions 351
Part A. Principles for Attribution 351
Part B. Excluded services 354
</TABLE>
<PAGE>
PART I. TERMS OF THE LICENCE
1. The Secretary of State, in exercise of the power conferred by Section
6(1)(c), and Section 6(6) and Section 7 of the Electricity Act 1989
(hereinafter referred to as the "Act") hereby licenses South Western
Electricity plc (registered in England and Wales under number 2366894)
as public electricity supplier to supply electricity to any premises in
the authorised area designated in Schedule 1 below during the period
specified in paragraph 3 below, subject to the Conditions set out in
Part II and Schedule 3 below (hereinafter referred to as the
"Conditions").
2. The Conditions are subject to modification or amendment in accordance
with their terms or with Sections 11, 14 or 15 of the Act. This
Licence is further subject to the terms as to revocation specified in
Schedule 2.
3. This Licence shall come into force on the transfer date appointed under
Section 65 of the Act and unless revoked in accordance with the
provisions of Schedule 2 shall continue until determined by not less
than 25 years' notice in writing given by the Secretary of State to the
Licensee, such notice not to be served earlier than a date being 10
years after the Licence comes into force.
JOHN WAKEHAM
26th March 1990 Secretary of State for Energy
<PAGE>
PART II. THE CONDITIONS
-----------------------
INTERPRETATION
--------------
Condition 1. Definitions and interpretation
- -------------------------------------------
1. Unless the contrary intention appears, words and expressions used in
the Conditions shall be construed as if they were in an Act of
Parliament and the Interpretation Act 1978 applied to them and
references to an enactment shall include any statutory modification or
re-enactment thereof after the date when this Licence comes into force.
2. Any word or expression defined for the purposes of any provision of
Part 1 of the Act shall, unless the contrary intention appears, have
the same meaning when used in the Conditions.
3. In the Conditions unless the context otherwise requires:
"Act" means the Electricity Act 1989.
"affiliate" in relation to the Licensee means any
holding company of the Licensee, any
subsidiary of the Licensee or any
subsidiary of a holding company of the
Licensee.
"Agent" has the meaning given in Condition 80.
"Auditors" means the Licensee's auditors for the
time being holding office in accordance
with the requirements of the Companies
Act 1985.
2
<PAGE>
"authorised" in relation to any business or activity
means authorised by licence granted under
Section 6 or by exemption granted under
Section 5 of the Act.
"authorised area" means the area from time to time
comprised in Schedule 1 to this Licence.
"Authorised Electricity
Operator" means any person (other than the
Licensee) who is authorised to generate,
transmit or supply electricity and for
the purposes of Condition 5A to 5C
inclusive shall include any person who
has made an application to be so
authorised which has not been refused
and any person transferring electricity
to or from England and Wales across an
interconnector or who has made an
application for use of interconnector
which has not been refused.
"Condition" means a condition set out in this Part
of this Licence.
"connection charges" means charges made or levied or to be
made or levied for the carrying out
(whether before or after the date on
which the Licence comes into force) of
works and provision and installation
of electrical plant, electric lines and
ancillary meters in constructing or
modifying entry and exit points on the
Licensee's Distribution System together
with charges in respect of maintenance
and repair of such items in so far as not
otherwise recoverable as use of system
charges and in respect of disconnection
3
<PAGE>
and the removal of electrical plant,
electric lines and ancillary meters
following disconnection, all as more
fully described in paragraphs 4 and 7 of
Condition 5, whether or not such charges
are annualised.
"contract" in relation to the supply of electricity
by the Licensee to a customer at
premises, means a special agreement in
accordance with section 22 of the Act.
"Contract Terms Conditions" means, as the context requires, either
the Conditions contained in Sub-section
(2) of Section B of this Licence or those
Conditions together with the equivalent
Conditions contained in the licences of
all other Electricity Suppliers.
"customer" means any person supplied or requiring to
be supplied with electricity at premises
within the authorised area whether by the
Licensee (including any affiliate or
related undertaking of the Licensee) or,
where the context requires, by another
Electricity Supplier, but shall not
include any Authorised Electricity
Operator in its capacity as such.
"data aggregation services" has the meaning given at sub-paragraph
3(e) of Condition 5B.
"data processing services" has the meaning given at sub-paragraph
3(d) of Condition 5B.
4
<PAGE>
"data retrieval services" has the meaning given at sub-paragraph
3(c) of Condition 5B.
"Data Transfer Catalogue" has the meaning given at sub-paragraph
6(c) of Condition 12.
"Data Transfer Service" means the service to be established,
operated and maintained by the Licensee,
in conjunction and co-operation with all
other public electricity suppliers, in
accordance with Condition 13.
"data transfer services" means the services of the Data Transfer
Service established in accordance with
Condition 13.
"date of the contract" means, in respect of any contract, the
date on which that contract is entered
into.
"Declared Net Capacity" means, in relation to generation plant,
the highest generation of electricity at
the main alternator terminals which can
be maintained for an indefinite period
of time without causing damage to the
plant, less so much of that capacity as
is consumed by the plant.
"deposit" means a deposit of money by way of
security for the payment of charges for
the supply of electricity.
"Designated Customer" means a customer supplied or requiring
to be supplied with electricity at
Designated Premises (but excluding such
customer in so far as he is supplied or
requires to be supplied at premises
other than Designated Premises).
5
<PAGE>
"Designated Premises" has the meaning determined in accordance
with Condition 58.
"Designated Supply Contract" has the meaning given in Condition 62.
"Distribution Business" means the business of the Licensee or
any affiliate or related undertaking
comprising or ancillary to:
(a) the distribution (whether for its
own account or that of third
parties) of electricity through
the Licensee's Distribution
System, including any business
in providing connections to such
system; and
(b) the provision of Metering and Data
Services (other than prepayment
meter services).
"Distribution Code" means the Distribution Code
required to be prepared pursuant
to Condition 11 and approved by
the Director, as from time to time
revised with the approval of the
Director.
"Domestic Customer" means a customer supplied or
requiring to be supplied with
electricity at Domestic Premises
(but excluding such customer in
so far as he is supplied or
requires to be supplied at
premises other than Domestic
Premises).
6
<PAGE>
"Domestic Premises" means premises at which a supply
is taken wholly or mainly for
domestic purposes.
"electricity purchase contract" includes any contract or
arrangement, other than for the
supply of electricity to a
customer at premises, under which
provision is made for the
making or receipt of
payments by reference to the
difference between
(a) an amount specified or
ascertainable under the terms
of such contract or
arrangement; and
(b) the price at which electricity
is sold or purchased under
the Pooling and Settlement
Agreement or any component of
either of such prices;
and
"electricity sale contract" shall be construed accordingly.
"Electricity Supplier" means either a Second Tier
Supplier or a public electricity
supplier.
"equivalent megawatt" in circumstances where demand is
measured only in megavolt
amperes means megavolt amperes
converted into megawatts using
for this purpose a power factor
of 0.9 megawatts per megavolt
ampere or such other factor as
may with the approval of the
Director be taken as being
7
<PAGE>
appropriate having regard to
electrical characteristics of
the supply, and cognate
expressions shall be construed
accordingly.
"established connection" means, in relation to any
premises, an existing
connection to the Licensee's
Distribution System which does
not require modification, or a
new or modified connection to
such system in respect of which
all works have been completed,
such that in either case
electricity is able to be
supplied to the premises in
accordance with the terms of the
relevant supply agreement.
"Exempt Supplier" means a person who is authorised
to supply electricity by virtue
of an exemption granted under
Section 5 of the Act.
"exempt supply services" means the services detailed at
paragraph 2 of Condition 35B, as
provided by the Licensee to
Exempt Suppliers in respect of
premises within the authorised
area.
"Existing Generation Business" means the Generation Business as
carried on on 30 September 1999
pursuant to arrangements in
place on that date and which
involves own-generation sets at
that date or generation sets in
which there is an accountable
interest at that date.
"financial year" bears the meaning given to it at
paragraph 1 of Condition 71.
8
<PAGE>
"fixed term period" means, in relation to any
Designated Supply Contract, a
specified period of more
than 12 months during which
the Principal Terms of that
contract may not be varied
by the Licensee other than
by agreement with the
customer.
"Fuel Security Code" means the document of that title
designated as such by the
Secretary of State as from
time to time amended.
"Generation Business" means the business if any) in
the generation of electricity,
being a business involving
own-generation sets or in
which there is an accountable
interest in generation sets, as
defined for the purposes of
Condition 75.
"generation set" means any plant or apparatus for
the production of electricity
and shall where appropriate
include a generating station
comprising more than one
generation set.
"goods or services" includes electric lines and
electric plant, and goods or
services designed or calculated
to promote the efficient use of
electricity, but excludes
meters, meter operation and
prepayment systems, and data
retrieval and related services.
"Grid Code" means the Grid Code required to
be prepared by the Transmission
Company and approved by the
Director as from time to time
revised with the approval of the
Director.
9
<PAGE>
"Grid Supply Point" means any point at which
electricity is delivered to the
Licensee's Distribution System
from the Transmission System.
"half-hourly metering equipment" means metering equipment which
is configured to record the
quantity of electricity (to
be calculated in kWh) supplied
to premises during each half
hour period of supply
and "non-half-hourly metering
equipment" shall be construed
accordingly.
"holding company" means a holding company within
the meaning of Sections 736,
736A and 736B of the Companies
Act 1985.
"interconnectors" means the electric lines and
electrical plant and meters
owned or operated by the
Transmission Company solely
for the transfer of
electricity to or from the
Transmission System into or
out of England and Wales.
"Licensee" means South Western
Electricity plc (registered
in England and Wales under
number 2366894) and (where
the context so requires)
shall include any Area Board
in respect of which the
Licensee is the successor
company.
10
<PAGE>
"Licensee's Distribution means the system of electric
System" lines situated wholly or partly
within the authorised area owned
or operated by the Licensee
for the distribution of
electricity between the Grid
Supply Points or generation sets
or other entry points and the
points where it is delivered to
customers or Authorised
Electricity Operators, and
includes any Remote Transmission
Assets owned by the Transmission
Company operated by the Licensee
and any electrical plant and
meters owned or operated by the
Licensee in connection with the
distribution of electricity, and
references to the distribution
system of any Authorised
Electricity Operator shall be
construed accordingly.
"Master Registration means the agreement of that
Agreement" title to be prepared by the
Licensee, in conjunction and
co-operation with all other
public electricity
suppliers, in accordance
with and comprising such
matters as are set out in
Condition 12.
"megawatt" or "MW" includes an equivalent megawatt.
"meter operation services" has the meaning given at
sub-paragraph 3(b) of Condition
5B.
"meter provision services" has the meaning given at
sub-paragraph 3(a) of Condition
5B.
11
<PAGE>
"Metering and Data Services" has the meaning given in
Condition 5B.
"metering equipment" includes any meter and any
associated equipment which
materially affects the operation
of that meter.
"Metering Point Administration means the service to be
Service" established, operated and
maintained by the Licensee in
accordance with Condition 12.
"metering point administration means the services
services" of the Metering Point
Administration Service
established in accordance
with Condition 12 or, where
the context requires, means
the equivalent services
provided by any other public
electricity supplier in
accordance with the
provisions of its public
electricity supply licence.
"New Generation Business" means any Generation Business
other than the Existing
Generation Business.
"notice" means (unless otherwise
specified) notice given in
writing or by any other
reasonable means.
"participating interest" bears the meaning ascribed to
that expression by Section 260
of the Companies Act 1985.
"Permitted Purpose" means the purpose of all or any
of the following:
(a) the Supply Business, the
Second Tier Supply
Business, the
Distribution Business or
any business or
activity within the
limits of paragraph
4 of Condition 72;
12
<PAGE>
(b) the Existing Generation
Business until (but not
after) 30 September 2000;
(c) any business conducted or
activity carried on
(other than the
Generation Business) on
17 September 1995 by
the Licensee or by a
company which was an
affiliate or related
undertaking of the
Licensee on that date;
and
(d) without prejudice to the
generality of paragraphs
(a) and (c), any
payment or transaction
lawfully made or
undertaken by the
Licensee for a purpose
within sub-paragraphs (i)
to (vii) of paragraph
5(b) of Condition 77
"Pooling and Settlement means the agreement of that
Agreement" title approved by the
Secretary of State as from
time to time amended with
the approval of the Director
(where so required pursuant
to its terms).
"prepayment meter services" has the meaning given at
paragraph 3 of Condition 35B.
"Principal Terms" means, in respect of any form
of Designated Supply Contract,
those terms which relate to:
(a) charges for the supply of
electricity;
13
<PAGE>
(b) any requirement to pay
charges for the supply by
prepayment through a
prepayment meter;
(c) any requirement for a
security deposit;
(d) the duration of the
contract;
(e) the rights to terminate the
contract (including any
obligation to pay a
termination fee); and
(f) the obligation to enter into
an agreement on the Standard
Terms of Connection,
and such other terms as may
reasonably be considered
significantly to affect the
evaluation of the contract.
"related undertaking" in relation to the Licensee
means any undertaking in which
the Licensee has a participating
interest.
"Relevant Consumers' means the committee appointed by
Committee" the Director under Section 2
of the Act for the area in
respect of which the Licensee is
the public electricity supplier.
"relevant premises" in relation to a Designated
Supply Contract, means any
premises supplied with
electricity under the terms of
the contract.
"Remote Transmission Assets" means any electric lines,
electrical plant or meters
owned by the Transmission
Company which:
14
<PAGE>
(a) are embedded in the
distribution system
of the Licensee or
any Authorised
Electricity Operator
other than the
Transmission Company
and are not directly
connected by lines
or plant owned by
the Transmission
Company to a
sub-station owned by
the Transmission
Company; and
(b) are by agreement
between the
Transmission Company
and the Licensee or
such Authorised
Electricity Operator
operated under the
direction and control
of the Licensee or such
Authorised Electricity
Operator.
"representation" includes any objection or any
other proposal made in writing.
"Retail Price Index" means the general index of
retail prices published by the
Office for National Statistics
each month in respect of all
items or:
(a) if the index for
any month in any
year shall not have
been published on
or before the last
day of the third
month after such
month, such index
for such month or
months as the
Director may after
consultation with
the Licensee
determine to be
appropriate in the
circumstances; or
(b) if there is a material
change in the basis of
the index, such other
index as the Director
may after consultation
with the Licensee
determine to be
appropriate in the
circumstances.
15
<PAGE>
"Second Tier Supplier" means a person authorised to
supply electricity pursuant to
Section 6(2) of the Act.
"Second Tier Supply Business" means the authorised business
(if any) of the Licensee or any
affiliate or related undertaking
as a private electricity
supplier.
"Settlement Agreement for means the agreement of that
Scotland" title to be prepared in
accordance with, and comprise
such matters as are set out in,
Condition 24 of Part V of the
Scottish Generation,
Transmission and Public
Electricity Supply Licences.
"settlement purposes" means for the purposes of
settlement as set out in the
Pooling and Settlement Agreement
or the Settlement Agreement for
Scotland.
"Separate Business" means each of the Distribution,
Supply, Second Tier Supply and
Generation Businesses taken
separately from one another and
from any other business of the
Licensee, but so that where all
or any part of such business is
carried on by an affiliate or
related undertaking of the
Licensee such part of the
business as is carried on by
that affiliate or related
undertaking shall be
consolidated with any other such
business of the Licensee (and of
any other affiliate or related
undertaking) so as to form a
single Separate Business.
16
<PAGE>
"Standard Terms of Connection" means the terms approved by the
Director, in accordance with
Condition 5C, for the retention
of an established connection to
the Licensee's Distribution
System.
"standby" means the periodic or
intermittent supply or sale of
electricity:
(a) to an Authorised
Electricity Operator to
make good any shortfall
in the availability of
electricity to that
operator for the
purposes of its supply
of electricity to
persons seeking such
supply; or
(b) to a customer of
the Licensee to
make good any
shortfall between
the customer's
total supply
requirements and
that met either by
its own generation
or by electricity
supplied by an
Authorised Electricity
Operator other than
the Licensee
such standby supply or sale
being provided at such entry
or exit point on the
Licensee's Distribution
System as the operator or
customer may request.
"subsidiary" means a subsidiary within the
meanings of Sections 736, 736A
and 736B of the Companies Act
1985.
"Supply Business" means the authorised business
of the Licensee as public
electricity supplier in the
authorised area, but shall
not include any activities
forming part of the
Distribution Business.
17
<PAGE>
"termination fee" means any sum of money or other
penalty (whether financial or
otherwise) which may be demanded
of a customer solely in
consequence of the termination
of a contract to supply
electricity to premises.
"top-up" means the supply or sale of
electricity on a continuing or
regular basis:
(a) to an Authorised
Electricity Operator
to make good any
shortfall in the
availability of
electricity (including,
where that operator is
using the Licensee's
Distribution System, to
make good any
distribution losses
on that system) to
that operator for
the purposes of its
supply of electricity
to persons seeking
such supply; or
(b) to a customer of
the Licensee to make
good any shortfall
between the customer's
total supply
requirements and
that met either by
its own generation
or by electricity
supplied by an
Authorised Electricity
Operator other than
the Licensee
such top-up supply or sale
being provided at such entry
or exit point on the
Licensee's Distribution
System as the operator or
customer may request.
18
<PAGE>
"Transfer Date" means such date as may be
appointed by the Secretary of
State by order under Section 65
of the Act.
"Transmission Company" means The National Grid Company
plc or any other holder for the
time being of a Licence to
transmit electricity in England
and Wales under Section 6(1)(b)
of the Act.
"Transmission System" means the system consisting
(wholly or mainly) of high
voltage electric lines owned or
operated by the Transmission
Company and used for the
transmission of electricity from
one generating station to a
sub-station or to another
generating station, or between
sub-stations or to any
interconnector, and includes any
electrical plant and meters
owned or operated by the
Transmission Company in
connection with the transmission
of electricity but shall not
include any Remote Transmission
Assets.
"ultimate holding company" Means
(i) a holding company of the
Licensee which is not
itself a subsidiary of
another company;
(ii) where a holding company of
the Licensee which is not
a subsidiary of another
company has entered into
an agreement affecting
the exercise of voting
rights in or the
appointment or removal
of directors of the
Licensee or any company of
which the Licensee is a
subsidiary, every party to
that agreement; and
19
<PAGE>
(iii) where the exercise of
voting rights in or
the appointment or
removal of directors
of a holding company
of the Licensee which
is not a subsidiary of
another company is
controlled by an
agreement, every party
to that agreement.
"undertaking" bears the meaning ascribed to
that expression by Section 259
of the Companies Act 1985.
"unmetered supply" means a supply of electricity
to premises which is not, for
the purpose of calculating the
charges for electricity
supplied to the customer at
such premises, measured by
metering equipment.
"use of system" means use of the Licensee's
Distribution System for the
distribution of electricity by
the Licensee for the Supply
Business or for any other
Authorised Electricity Operator.
"use of system charges" means charges made or levied or
to be made or levied by the
Licensee for the provision of
services as part of the
Distribution Business to any
Authorised Electricity Operator
or to the Licensee for the
purposes of its Supply Business
or Second Tier Supply Business
as more fully described at
paragraph 3 of Condition 5 and
at paragraph C2 of Part C of
Schedule 3A to this Licence; but
shall not include connection
charges.
20
<PAGE>
"valid notice of termination" has the meaning given in
Condition 66.
4. Unless otherwise specified, any reference to a numbered Condition (with
or without a suffix letter) or Schedule is a reference to the Condition
or Schedule bearing that number in this Licence, and any reference to a
numbered paragraph (with or without a suffix letter) is a reference to
the paragraph bearing that number in the Condition or Schedule in which
the reference occurs.
5. In construing the provisions of this Licence, the heading or title of
any Part, Section, Condition, Schedule or paragraph shall be
disregarded.
6. Where any obligation of the Licensee is required to be performed by a
specified date or within a specified period, and where the Licensee has
failed so to perform, such obligation shall continue to be binding and
enforceable after the specified date or after the expiry of the
specified period (but without prejudice to all rights and remedies
available against the Licensee by reason of the Licensee's failure to
perform by that date or within that period).
7. The provisions of Section 109 of the Act shall apply for the purposes
of the delivery or service of any documents, directions or notices to
be delivered or served pursuant to any Condition or Schedule, and
directions issued by the Director pursuant to any Condition or Schedule
shall be delivered or served as aforesaid.
21
<PAGE>
SECTION A. DISTRIBUTION BUSINESS OBLIGATIONS
---------------------------------------------
Condition 2. Availability of Distribution Business resources
- ------------------------------------------------------------
1. The Licensee shall at all times act in a manner calculated to secure
that it has sufficient management resources, financial resources and
financial facilities to enable it:
(a) to carry on the Distribution Business; and
(b) to comply with such of its obligations under the Act and this
Licence as apply to the Distribution Business.
2. The Licensee shall submit a certificate addressed to the Director,
approved by a resolution of the board of directors of the Licensee and
signed by a director of the Licensee pursuant to that resolution. Such
certificate shall be submitted in June of each year. Each certificate
shall be in one of the following forms:
(a) "After making enquiries, the directors of the Licensee have a
reasonable expectation that the Licensee will have available
to it, after taking into account in particular (but without
limitation) any dividend or other distribution which might
reasonably be expected to be declared or paid, sufficient
financial resources and financial facilities to enable the
Licensee to carry on the Distribution Business for a period of
12 months from the date of this certificate."
(b) "After making enquiries, the directors of the Licensee have a
reasonable expectation, subject to what is said below, that
the Licensee will have available to it, after taking into
account in particular (but without limitation) any dividend or
other distribution which might reasonably be expected to be
declared or paid, sufficient financial resources and financial
22
<PAGE>
facilities to enable the Licensee to carry on the Distribution
Business for a period of 12 months from the date of this
certificate. However, they would like to draw attention to the
following factors which may cast doubt on the ability of the
Licensee to carry on the Distribution Business ...."
(c) "In the opinion of the directors of the Licensee, the Licensee
will not have available to it sufficient financial resources
and financial abilities to enable the Licensee to carry on the
Distribution Business for a period of 12 months from the date
of this certificate."
3. The Licensee shall submit to the Director with that certificate a
statement of the main factors which the directors of the Licensee have
taken into account in giving that certificate.
4. The Licensee shall inform the Director in writing immediately if the
directors of the Licensee become aware of any circumstance which causes
them no longer to have the reasonable expectation expressed in the then
most recent certificate given under paragraph 2.
5. The Licensee shall use its best endeavours to obtain and submit to the
Director with each certificate provided for in paragraph 2 a report
prepared by its Auditors and addressed to the Director stating whether
or not the Auditors are aware of any inconsistencies between, on the
one hand, that certificate and the statement submitted with it and, on
the other hand, any information which they obtained during their audit
work.
23
<PAGE>
Condition 3. Distribution Charge restriction conditions: definitions
- --------------------------------------------------------------------
1. In this Condition, in Conditions 3A to 3E and in Schedule 3A:
"attributed" means, when used in relation to
the fossil fuel levy or payments
in lieu thereof or transmission
connection point charges or
remote transmission asset
rentals or distribution losses
or transmission costs or allowed
distribution costs, attributed
in accordance with the
principles set out in Part A
of Schedule 3A and attribute,
attributed, attributable and
attribution shall be construed
accordingly.
"average charge per unit means the distribution revenue
distributed" in the relevant year divided
by the regulated quantity
distributed in that year.
"average specified rate" means the average of the daily
base rates of Barclays Bank plc
current from time to time
during the period in respect of
which the calculation falls to
be made.
"distribution charge restriction means Conditions 3 to 3E
conditions" together with Schedule 3A to
this Licence, as from time to
time modified or replaced in
accordance therewith or pursuant
to Sections 11, 14 or 15 of
the Act.
"distribution losses" means units unaccounted for on
the Licensee's Distribution
System, measured as being the
difference between the units
metered on entry into the system
and the units metered on leaving
the system.
24
<PAGE>
"distribution revenue" means the revenue (measured on
an accruals basis) derived by
the Licensee from the provision
of distribution services in the
relevant year, after deduction
of:
(i) an amount equal to such
part of the total amount
payable in that relevant
year to the Transmission
Company (measured on
an accruals basis) in
respect of transmission
connection point charges
and remote transmission
asset rentals and which
would otherwise be included
in distribution revenue by
reason of being recovered
in that relevant year by
the Licensee in its use of
system charges, as falls to
be attributed to the
regulated quantity
distributed in that
relevant year; and
(ii) value added tax if any)
and any other taxes based
directly on the amounts so
derived.
"distribution services" means all services provided by
the Licensee as part of its
Distribution Business other than
excluded services.
"EHV premises" means those premises to which
units are delivered by the
Licensee which fall to be
treated as EHV premises in
accordance with Part B of
Schedule 3A.
25
<PAGE>
"EHV units" means units distributed by the
Licensee which are delivered or
deemed to be delivered to EHV
premises.
"excluded services" means those services provided by
the Licensee which in accordance
with the principles set out in
Part C of Schedule 3A fall to
be treated as excluded services.
"HV units" means units (other than EHV
units) distributed by the
Licensee which are delivered to
premises connected to the
Licensee's Distribution
System at a voltage at or
higher than 1000 volts.
"LV units" means units distributed
by the Licensee which are
delivered to premises
connected to the Licensee's
Distribution System at a voltage
less than 1000 volts.
"LV1 units" means LV units which are
distributed by the Licensee
outside night-time periods to
Domestic Premises or small
premises (other than Domestic
Premises) where the appropriate
use of system charges apply
different rates in night-time
periods as opposed to other
times of day, for the avoidance
of doubt including the use of
system charges under the tariffs
specified in paragraph D2 of
Part D of Schedule 3A
.
"LV2 units" means LV units which are
distributed by the Licensee to
Domestic Premises or small
premises (other than Domestic
Premises):
(a) during night-time
periods, where the
26
<PAGE>
appropriate use of
system charges apply
different rates in
night-time periods
as opposed to other
times of the day; or
(b) where the appropriate
use of system charges
are incorporated into
tariffs which restrict
availability of supply
to specified off-peak
periods,
for the avoidance of doubt
including the use of system
charges under the tariffs
specified in paragraph D3 of
Part D of Schedule 3A.
"LV3 units" means LV units other than LV1
and LV2 units, for the avoidance
of doubt including units
distributed under the tariffs
specified in paragraph D4 of
Part D of Schedule 3A.
"maximum average charge per means the charge calculated in
unit distributed" accordance with the formula in
paragraph 1 of Condition 3A.
"metered" means, in relation to any
quantity distributed, as
measured by a meter installed
for such purpose or (where no
such meter is installed or it
is not reasonably practicable to
measure the quantity by such
meter) as otherwise reasonably
calculated.
"0.1 MW customer" means any customer other than an
over 0.1 MW customer in its
capacity as such.
27
<PAGE>
"0.1 MW premises" means any premises other than
over 0.1 MW premises.
"over 0.1 MW customer" means a customersupplied at over
0.1 MW premises, but shall not
include such customer insofar
as supplied at 0.1 MW premises.
"over 0.1 MW premises" means premises at which the
average of the maximum monthly
demands in the three months of
highest maximum demand in any
period of twelve consecutive
months commencing on or after
January 1993 exceeds one tenth
of a megawatt.
"regulated distribution unit means as the case may be HV
category" units or LV1 units or LV2 units
or LV3 units.
"regulated quantity distributed" means the aggregate quantity of
units distributed (both for the
Supply Business of the Licensee
and on behalf of third parties
under use of system) by the
Licensee through the Licensee's
Distribution System in relevant
year t metered at exit points on
leaving the Licensee's
Distribution System but
excluding for this purpose:
(a) units distributed for the
purpose of supply to
premises outside the
Licensee's authorised area;
and
(b) EHV units.
"relevant year" means a financial year
commencing on or after 1st April
1990.
28
<PAGE>
"relevant year t" means that relevant yearfor the
purposes of which any
calculation falls to be made;
"relevant year t-1" means the
relevant year preceding relevant
year t or, in respect of the
period prior to 1st April
1990, the period of 12
calendar months commencing
on 1st April 1989; and
similar expressions shall
be construed accordingly.
"remote transmission asset rental" means any rent or other
periodic payment payable
by the Distribution
Business of the Licensee
to the Transmission Company in
respect of remote transmission
assets forming part of the
Licensee's Distribution
System.
"sixth relevant year" means the relevant year
commencing 1st April 1995.
"transmission connection point means charges levied by the
charges" Transmission Company as
connection charges by direct
reference to the number or
nature of the connections
between the Licensee's
Distribution System and
the transmission system
and payable by the
Distribution Business of
the Licensee.
"unit" means a kilowatt hour.
29
<PAGE>
Condition 3A. Restriction of distribution charges
- -------------------------------------------------
Basic Formula
- ------------
1. Without prejudice to Condition 3D the Licensee shall in setting its
charges for the provision of distribution services use its best
endeavours to ensure that in any relevant year the average charge per
unit distributed shall not exceed the maximum average charge per unit
distributed calculated in accordance with the following formula:
M(dt) = P(dt)+ PN(dt) - K(dt)
2. For the purposes of paragraph 1, Mdt means the maximum average charge per
unit distributed in relevant year t.
Formula for P(dt) as used in paragraph 1
- --------------------------------------
3. For the purposes of paragraph 1, Pdt is derived from the following formula:
P(dt) = ((PU+PM). GR(t).PID(t)) + (PL.(AL(t)-L(t)).PIL(t))
-----------------------------------------------
D(t)
where:
PU means the amount set against that term in the part
of Annex A to this Condition that applies to
the Licensee.
30
<PAGE>
PM means the amount set against that term in the part
of Annex A to this Condition that applies to
the Licensee.
GR(t) is derived from the following formula:
GR(t) = 0.5 {SIGMA)P(oi).D(it) + C(dt}) GR(t-1)
-----------------------------------
(SIGMA)P(oi).D(it-1) C(dt-1)
where for the relevant year beginning 1st
April 1995 GR(t-1) equals 1.
(SIGMA) means the summation across all regulated
distribution unit categories i.
P(oi) means in respect of each regulated
distribution unit category i set out in
column 1 under that term in the part of
Annex A to this Condition that applies to
the Licensee the value opposite that
category in column 2.
D(it) means that number of units in each regulated
distribution unit category i distributed in
relevant year t.
D(it-1) means that number of units in each regulated
distribution unit category i distributed in
relevant year t-1.
C(dt) means a notional figure, representing the
number of customers in the authorised area
defined (for the purpose of this term C(dt)
only) for each relevant year, given in the
table appearing under that term in the part
of Annex A to this Condition that applies to
the Licensee.
31
<PAGE>
C(dt-1) means the number equal to Cdt in relevant year
t-1.
PID(t) is derived from the following formula:
PID(t) = (1 + RPI(t) - Xd(t)
------------------ PIDt-1
100
where, for the relevant year beginning 1st
April 1995, PID(t-1) equals 1.
RPI(t) means the percentage change (whether of a
positive or a negative value) in the
arithmetic average of the Retail Price Index
numbers published or determined with respect
to each of the six months July to December
(inclusive) in relevant year t-1 and the
arithmetic average of the Retail Price Index
numbers published or determined with respect
to the same months in relevant year t-2.
X(dt) for any relevant year beginning on or after 1
April 1997, shall equal 3.
PL means an amount equal to 3.0656p.
AL(t) means an amount (in units) representing allowed
distribution losses in relevant year t, being the
allowed percentage of the adjusted units
distributed (calculated as provided in paragraph
E5 of Part E of Schedule 3A) where in respect of
32
<PAGE>
each relevant year t, the allowed percentage shall
equal that percentage which the aggregate of
adjusted distribution losses (calculated as
provided in paragraphs E2 to E5 of Part E of
Schedule 3A) over the preceding relevant years
(commencing with the twelve-month period from 1st
April 1989, or, if the number of preceding
relevant years exceeds nine, relevant year t-10)
bears to the aggregate of adjusted units
distributed (calculated as aforesaid) over the
corresponding relevant years: save that for this
purpose adjusted distribution losses in respect of
the twelve-month period from 1st April 1989 shall
be derived by applying the initial relevant loss
percentage (calculated as provided in paragraphs
E6 to E8 of Part E of Schedule 3A) to the adjusted
units distributed in that period.
L(t) means in respect of relevant year t,
adjusted grid supply point purchases less
adjusted units distributed (calculated as
provided in paragraphs E2 to E5 of Part E of
Schedule 3A).
PIL(t) is derived from the following formula:
PIL(t) = (1 + RPI(t) PIL(t-1)
----
100
where, for the relevant year beginning 1st
April 1995, PIL(t-1) equals 1.
D(t) means the regulated quantity distributed in
relevant year t.
Formula for PNdt as used in paragraph 1
- ---------------------------------------
33
<PAGE>
4. For the purposes of Paragraph 1, in the ninth and subsequent relevant
years the term PN(dt) shall be calculated in accordance with the
following formula:
PN(dt) = (PS + PR)PIR(t) - TA(dt-1) - GA(dt-1)
--------------------------------------
D(t)
and for each relevant year t prior to the ninth relevant year PN(dt)
shall be 0.
where:
PS means an amount equal to (pound)4.87 million
for each of the ninth to the thirteenth
relevant years, and thereafter shall be 0.
PR means, in the ninth and all subsequent relevant
years, the amount given under that heading in
Annex B to this Condition.
PIR(t) is derived from the following formula:
PIR(t) = (1 + RPI(t)PIR(t-1
-----
100
where for the ninth relevant year PIR(t-1) equals 1
TA(dt) in respect of any relevant year t, is derived from
the following formula:
TA(dt) = M(y)
(SIGMA) P(sd).C(mn)
M(x)
34
<PAGE>
save that TA shall be a figure not less than
0, and shall for each relevant year t prior
to the ninth relevant year be 0.
where:
My
(SIGMA) means a summation across all the months M(x) to
M(y) in each
M(x)
relevant year.
M(x) means, in the ninth relevant year, the month
commencing 1st July 1998, and means in each
subsequent relevant year the month
commencing 1st April in such relevant year.
M(y) means, in each relevant year, the month commencing
1st March in such relevant year.
P(sd) means the amount given under that heading in
Annex B to this Condition.
C(mn) means, in respect of each month Mx to My in
the ninth and each subsequent relevant year,
a proportion of the total number of 0.1MW
customers within the authorised area
(expressed as a figure => -1 and <= 1) to be
calculated by reference to the first day of
such month in accordance with the following
formula:
C(mn) = N - SC
where:
N means a figure equal to:
35
<PAGE>
(a) in respect of the months commencing 1st July 1998,
1st August 1998 and 1st September 1998, the amount
given under that heading in Annex B to
this Condition;
(b) in respect of the months commencing 1st
October 1998, 1st November 1998 and 1st December
1998, 0.5; and
(c) in respect of the month commencing 1st January
1999 and all subsequent months, 1.
SC in respect of the first day of each relevant
month, means a proportion of the total
number of 0.1MW customers within the
authorised area (expressed as a figure => 0
and <= 1), being customers who may be
supplied by a Second Tier Supplier on such
date in accordance with any direction or
variation of a direction issued by the
Director (and not subsequently withdrawn or
varied) pursuant to condition 3 of that
Supplier's licence to supply electricity.
GA(dt) shall in the ninth relevant year, where the
earliest date specified (and not
subsequently withdrawn or varied to a later
date) in any direction or variation of a
direction issued by the Director, pursuant
to condition 3 of the licence held by any
Second Tier Supplier, in relation to the
supply of electricity to any premises:
(a) is in April 1998, be 0;
(b) is in May 1998, be the amount given for that
month under the heading GAdt in Annex B to
this Condition;
36
<PAGE>
(c) is in June 1998, be the amount given for that
month under that heading; or
(d) is in July 1998 or any subsequent month, be
the amount given for July under that heading,
and shall in each relevant year t other than
the ninth relevant year be 0.
Formula for Kdt as used in Paragraph 1
5. For the purposes of paragraph 1, Kdt means the correction factor per
unit (whether of a positive or a negative value) to be applied to the
average charge per unit distributed in relevant year t (subject to
paragraph 3 of Condition 3B) and is derived from the following formula:
K(dt) = Rdt-1 - (D(t-1). Mdt-1)
---------------------(1 + I(dt)
Dt ----
100
provided that: notwithstanding the above, the value of Kdt for
the sixth relevant year shall be that value
required by Condition 3A in the licence in the
form in force on 31 March 1995.
where:
Rd(t-1) means the distribution revenue in relevant year
t-1.
D(t-1) means the regulated quantity distributed in
relevant year t-1.
37
<PAGE>
M(dt-1) means maximum average charge per unit distributed
in relevant year t-1.
I(dt) means that interest rate in relevant year t
which is equal to, where Kdt (taking no
account of Id for this purpose) has a
positive value, the average specified rate
plus 4, or where Kdt (taking no account of
Id for this purpose) has a negative value,
the average specified rate.
6. In this Condition, any term defined for the purposes of paragraph 1
shall have the same meaning in all paragraphs of this Condition.
38
<PAGE>
ANNEX A to Condition 3A
- ------------------------
Distribution values specific to individual companies
EASTERN ELECTRICITY plc
(pound)m
---------
PU 327.4
PM 36.0
Cdt
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 3073
1 April 1995 3107
1 April 1996 3152
1 April 1997 3196
1 April 1998 3241
1 April 1999 3286
every subsequent relevant year 3286
39
<PAGE>
P0(i)
1 2
unit category i value (p)
--------------- ---------
LV1 2.0009
LV2 0.3031
LV3 1.3431
HV 0.4584
EAST MIDLANDS ELECTRICITY plc
(pound)m
---------
PU 271.6
PM 30.2
Cdt
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 2248
1 April 1995 2272
1 April 1996 2297
1 April 1997 2321
1 April 1998 2346
1 April 1999 2371
every subsequent relevant year 2371
40
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- ---------
LV1 1.6131
LV2 0.5557
LV3 1.5711
HV 0.6350
LONDON ELECTRICITY plc
(pound)m
--------
PU 260.9
PM 31.0
C(dt)
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 1955
1 April 1995 1974
1 April 1996 1986
1 April 1997 1998
1 April 1998 2010
1 April 1999 2022
every subsequent relevant year 2022
41
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- ---------
LV1 2.2073
LV2 0.4057
LV3 1.5912
HV 0.5932
MANWEB plc
(pound)m
-------
PU 178.2
PM 21.6
C(dt)
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 1354
1 April 1995 1366
1 April 1996 1378
1 April 1997 1391
1 April 1998 1403
1 April 1999 1415
every subsequent relevant year 1415
42
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- ---------
LV1 2.1041
LV2 0.4323
LV3 1.7558
HV 0.5097
MIDLANDS ELECTRICITY plc
(pound)m
--------
PU 267.2
PM 31.2
Cdt
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 2210
1 April 1995 2231
1 April 1996 2251
1 April 1997 2271
1 April 1998 2291
1 April 1999 2311
every subsequent relevant year 2311
43
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- --------
LV1 1.9729
LV2 0.3966
LV3 1.6108
HV 0.5992
NORTHERN ELECTRIC plc
(pound)m
--------
PU 176.2
PM 22.2
C(dt)
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 1446
1 April 1995 1456
1 April 1996 1466
1 April 1997 1476
1 April 1998 1486
1 April 1999 1496
every subsequent relevant year 1496
44
<PAGE>
P0i
1 2
unit category i value (p)
--------------- --------
LV1 2.0911
LV2 0.3273
LV3 1.9284
HV 0.4723
NORWEB plc
(pound)m
--------
PU 254.5
PM 28.8
Cdt
'000s
-----
relevant year beginning on
----------------------------
1 April 1994 2170
1 April 1995 2182
1 April 1996 2196
1 April 1997 2209
1 April 1998 2223
1 April 1999 2236
every subsequent relevant year 2236
45
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- --------
LV1 2.1750
LV2 0.2821
LV3 1.6304
HV 0.5335
SEEBOARD plc
(pound)m
--------
PU 203.0
PM 29.2
Cdt
'000s
-----
relevant year beginning on
--------------------------
1 April 1994 1982
1 April 1995 1997
1 April 1996 2031
1 April 1997 2030
1 April 1998 2046
1 April 1999 2062
every subsequent relevant year 2062
46
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- ---------
LV1 1.8735
LV2 0.3213
LV3 1.4098
HV 0.5892
SOUTHERN ELECTRIC plc
(pound)m
--------
PU 304.4
PM 35.7
Cdt
'000s
-----
relevant year beginning on
---------------------------
1 April 1994 2576
1 April 1995 2602
1 April 1996 2633
1 April 1997 2664
1 April 1998 2695
1 April 1999 2727
every subsequent relevant year 2727
47
<PAGE>
P(oi)
1 2
unit category i value (p)
--------------- --------
LV1 2.0600
LV2 0.3816
LV3 1.4815
HV 0.5560
SOUTH WALES ELECTRICITY plc
(pound)m
--------
PU 142.2
PM 17.6
Cdt
'000s
-----
48
<PAGE>
relevant year beginning on
--------------------------
1 April 1994 952
1 April 1995 959
1 April 1996 966
1 April 1997 974
1 April 1998 982
1 April 1999 990
every subsequent relevant year 990
P(oi)
1 2
unit category i value (p)
--------------- ---------
LV1 2.4442
LV2 0.3641
LV3 2.2009
HV 0.7272
SOUTH WESTERN ELECTRICITY plc
(pound)m
--------
PU 186.3
PM 22.4
Cdt
'000s
-----
49
<PAGE>
relevant year beginning on
--------------------------
1 April 1994 1287
1 April 1995 1299
1 April 1996 1313
1 April 1997 1327
1 April 1998 1341
1 April 1999 1355
every subsequent relevant year 1355
P(oi)
1 2
unit category i value (p)
--------------- --------
LV1 2.3889
LV2 0.6679
LV3 1.8707
HV 0.5072
YORKSHIRE ELECTRICITY GROUP plc
(pound)m
--------
PU 249.7
PM 27.9
C(dt)
'000s
-----
50
<PAGE>
relevant year beginning on
---------------------------
1 April 1994 2036
1 April 1995 2051
1 April 1996 2065
1 April 1997 2080
1 April 1998 2094
1 April 1999 2109
every subsequent relevant year 2109
P(oi)
1 2
unit category i value (p)
--------------- ---------
LV1 1.9497
LV2 0.3271
LV3 1.6654
51
<PAGE>
ANNEX B to Condition 3A
Values for paragraph 4 of this Condition
<TABLE>
<CAPTION>
PR (pound)M P sd (pound)M N-1.7.98 GAdt (pound)M GAdt (pound)M GAdt (pound)M
to 1.9.98 May June July
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EASTERN 4.46 0.99 0.105 0.21 0.78 1.78
EAST MIDLANDS 3.53 0.67 0.106 0.15 0.57 1.29
LONDON 3.21 0.63 0.108 0.13 0.49 1.12
MANWEB 2.53 0.43 0.086 0.09 0.34 0.77
MIDLANDS 3.51 0.70 0.091 0.15 0.56 1.28
NORTHERN 2.64 0.42 0.101 0.10 0.36 0.83
NORWEB 3.42 0.67 0.081 0.15 0.54 1.23
SEEBOARD 3.23 0.60 0.106 0.14 0.50 1.14
SOUTHERN 3.96 0.85 0.107 0.18 0.67 1.52
SWALEC 2.07 0.31 0.109 0.06 0.23 0.53
SOUTH WESTERN 2.48 0.48 0.107 0.09 0.33 0.74
YORKSHIRE 3.28 0.57 0.105 0.14 0.51 1.16
SCOTTISH POWER 3.01 0.67 0.096 0.12 0.45 1.02
HYDRO-ELECTRIC 1.74 0.29 0.162 0.04 0.16 0.36
</TABLE>
52
<PAGE>
Condition 3B. Restriction of distribution charges: adjustments
- --------------------------------------------------------------
1. If, in respect of any relevant year, the average charge per unit
distributed exceeds the maximum average charge per unit distributed by
more than 3 per cent, the Licensee shall furnish an explanation to the
Director and in the next following relevant year the Licensee shall not
effect any increase in charges unless it has demonstrated to the
reasonable satisfaction of the Director that the average charge per
unit distributed would not be likely to exceed the maximum charge per
unit distributed in that next following relevant year.
2. If, in respect of any two successive relevant years, the sum of the
amounts by which the average charge per unit distributed has exceeded
the maximum average charge per unit distributed is more than 4 per
cent, then in the next following relevant year the Licensee shall, if
required by the Director, adjust its charges such that the average
charge per unit distributed would not be likely, in the judgment of the
Director, to exceed the maximum average charge per unit in that next
following relevant year.
3. If, in respect of two successive relevant years, the average charge per
unit distributed is less than 90 per cent of the maximum average charge
per unit distributed, the Director, after consultation with the
Licensee, may direct that in calculating Kdt for the purposes of
paragraph 1 of Condition 3A in respect of the next following relevant
year, there shall be substituted for Rdt-1 in the formula at paragraph
5 of Condition 3A such figure as the Director may specify being not
less than Rdt-1 and not more than 0.90 (Dt-1.Mdt-1).
53
<PAGE>
Condition 3C. Information to be provided to the Director in connection with the
- -------------------------------------------------------------------------------
distribution charge restriction conditions
- -------------------------------------------
1. Where the Licensee is intending to make any change in charges for the
provision of distribution services regulated under Condition 3A the
Licensee shall (unless otherwise agreed by the Director) not later than
the date of publication of such charges provide the Director with:
(a) a written forecast of the maximum average charge per unit
distributed, together with its components, in respect of the
relevant year t in which such a change is to take effect and
in respect of the next following relevant year t+1; and
(b) a written estimate of the maximum average charge per unit
distributed, together with its components, in respect of the
relevant year t-1 immediately preceding the relevant year in
which the change is to take effect unless a statement
complying with paragraph 7 in respect of relevant year t-1 has
been furnished to the Director before the publication of the
proposed change.
2. Where, at any time during the eighth relevant year, the Licensee
intends to change the principles of attribution or any provisional
attribution specified in a statement already made to the Director, the
change or the provisional attribution shall be specified in a written
statement signed by a person authorised to sign the statement by the
directors of the Licensee which statement shall not provide for a
retrospective change of principles or for any re-attribution of
payments already made or any payment where the event giving rise to
that payment has already occurred.
3. If within three months of the commencement of any relevant year t the
Licensee has not made any such change in charges as is referred to in
54
<PAGE>
paragraph 1, the Licensee shall provide the Director with a written
forecast of the maximum average charge per unit distributed, together
with its components, in respect of the relevant year t.
4. The Director may issue directions providing that any forecast or
estimate provided in accordance with paragraphs 1, 2 or 3 shall be
accompanied by such information as regards the assumptions underlying
the forecast or estimate as may be necessary to enable the Director to
be satisfied that the forecast or estimate has been properly prepared
on a consistent basis.
5. Subject as provided in sub-paragraph (b) below, not later than six
weeks after the commencement of each relevant year t, the Licensee
shall send to the Director a statement as to:
(a) whether or not the provisions of Condition 3B are likely to be
applicable in consequence of the average charge per unit
distributed in the preceding relevant year t-1 or the two
preceding relevant years t-1 and t-2; and
(b) its best estimate as to the relevant correction factor Kdt to
be applied in calculating the maximum average charge per unit
distributed in respect of the relevant year t.
6. Not later than 15 January in the ninth and tenth relevant years the
Licensee shall send to the Director a written estimate of the value of
the term TA for that year (TAdt), together with an estimate of the
value of each of its component parts, as detailed in paragraph 4 of
Condition 3A.
7. Not later than three months after the end of a relevant year the
Licensee shall send the Director a statement, in respect of that
relevant year, showing the specified items referred to in paragraph 9.
55
<PAGE>
8. The statement referred to in the preceding paragraph shall be:
(a) accompanied by a report from the Auditors that in their
opinion (i) such statement fairly presents each of the
specified items referred to in paragraph 9 in accordance with
the requirements of the distribution charge restriction
conditions and (ii) the amounts shown in respect of each of
those specified items are in accordance with the Licensee's
accounting records which have been maintained in respect of
each of the relevant Separate Businesses in accordance with
Condition 71; and
(b) certified by a director of the Licensee on behalf of the
Licensee that to the best of his knowledge, information and
belief having made all reasonable enquiries:
(i) there is no amount included in its calculations under
Condition 3A and Schedule 3A which represents other than:
(aa) bona fide consideration for the provision of
distribution services in the course of its
Distribution Business; or
(bb) an amount permitted under the distribution charge
restriction conditions to be so included;
(iii) there is no amount included in its calculations of
allowed security costs under Condition 3D which
represents other than an amount permitted under the
distribution charge restriction conditions to be so
included;
(iv) no service has been treated as an excluded service
which was not properly so treated and no amount
included in the revenues in respect thereof
represents other than bona fide consideration for the
provision of the excluded service to which it
relates; and
56
<PAGE>
(v) all amounts which should properly be taken into
account for the purposes of the distribution charge
restriction conditions have been taken into account.
9. The specified items to be contained in the statement referred to in
paragraph 7 shall be the following:
(a) the regulated quantity distributed;
(b) the quantity distributed in each regulated distribution unit
category;
(c) the average charge per unit distributed;
(d) the amount in respect of the Terms ALt and Lt, in paragraph 3 of
Condition 3A calculated as therein provided;
(e) the value of the term TAdt, together with the value of each of
its component parts, as detailed in paragraph 4 of Condition
3A;
(f) the information referred to at paragraph 8 of Condition 3D; and
(g) the statements and information referred to in paragraph A5, B2,
D1 and E10 of Schedule 3A
provided that the statement to be provided in the ninth relevant year
in respect of the immediately preceding relevant year shall contain the
information required by paragraph 10 of Condition 3E of the Licence in
the form in force on 31 March 1998.
10. Where the Director issues directions in accordance with paragraph 9 of
Condition 3D or paragraphs A6, B3, C8, D5 or E11 of Schedule 3A then
such directions shall not have effect from a date earlier than the
57
<PAGE>
commencement of the relevant year to which the statement last furnished
to the Director pursuant to paragraph 7 prior to the issue of the
directions related, unless such statement (or the accompanying report
or certificate under paragraph 8) or any statement, report or
certificate in respect of an earlier relevant year was incorrect or was
misleading in any material respect.
11. Where the Director issues such directions as are referred to in the
preceding paragraph the Director may require the Licensee to provide a
revised statement in respect of such of the specified items as may be
affected by the directions, and the Licensee shall comply with such
request.
58
<PAGE>
Condition 3D. Distribution Business allowance in respect of security costs
- --------------------------------------------------------------------------
1. At any time during a security period, the Licensee may give notice in
writing to the Director suspending, with effect from the date of
receipt of the notice by the Director, application of such of the
distribution charge restriction conditions as may be specified in the
notice for the unexpired term of the security period.
2. At any time during a security period, the Director may (having regard
to his duties under the Act) by means of directions:
(a) suspend or modify for the unexpired term of the security
period the distribution charge restriction conditions or any
part or parts thereof; or
(b) introduce for the unexpired term of the security period new
distribution charge restriction conditions
in either case, so as to make such provision as in the opinion
or estimation of the Director is requisite or appropriate:
(i) to enable the Licensee to recover by means of
increased charges an amount estimated as being equal
to the Licensee's allowed security costs during such
period; and
(ii) to ensure that such part of the amount referred to in
sub-paragraph (i) above as is estimated as being
equal to the allowed security costs incurred by the
Licensee as costs in its Distribution Business are
recovered by means of appropriate equitable increases
on the charges made by the Licensee in its
Distribution Business
59
<PAGE>
and the Licensee shall comply with the terms of any directions so
issued.
3. At any time following a security period, the Director may (following
such consultation with the Licensee and others as the Director may
consider appropriate) issue directions suspending or modifying the
distribution charge restriction conditions or any part or parts thereof
or replacing such directions as may have been made during the security
period and introducing such new distribution charge restriction
conditions as in the opinion of the Director are appropriate in all the
circumstances (including at the Director's discretion an appropriate
adjustment having regard to any profit gained or foregone by the
Licensee during the security period), and the Licensee shall comply
with any directions so issued.
4. At any time within three months after the issue of directions by the
Director under paragraph 3, the Licensee may serve on the Director a
disapplication request in respect of such of the distribution charge
restriction conditions or any part or parts thereof as are specified in
the request.
5. If within three months of the receipt by the Director of the
disapplication request referred to in paragraph 4, the Director has
either not agreed in writing to such disapplication request or has not
made a reference to the Competition Commission under Section 12 of the
Act relating to the modification of the distribution charge restriction
conditions, the Licensee may deliver one month's written notice to the
Director terminating the application of the distribution charge
restriction conditions (or any part or parts thereof) as were specified
in the disapplication request.
6. Subject to paragraphs 7 and 9, the Licensee shall in any relevant year
be entitled to recover an aggregate amount equal to its allowed
security costs in that year or (insofar as not previously recovered)
any previous year, by means of appropriate equitable increases on the
charges made by the Licensee in its Distribution Business.
7. Paragraph 6 shall not apply in so far as such allowed security costs:
60
<PAGE>
(a) were otherwise recovered by the Licensee; or
(b) were taken into account by the Director in setting
distribution charge restriction conditions by means of
directions issued under paragraph 3.
8. The Licensee shall following the end of each relevant year provide to
the Director, as being one of the specified items to be contained in
the statement referred to at paragraph 8 of Condition 3C, details in
respect of that relevant year of:
(a) the amount of the Licensee's allowed security costs; and
(b) the aggregate amounts charged under paragraph 6 on account of
the Licensee's allowed security costs; and
(c) the bases and calculations underlying the increases in charges
made by the Licensee in its Distribution Business under
paragraph 6.
9. Where the Director is satisfied that the Licensee has recovered amounts
in excess of the allowed security costs, the Director may issue
directions requiring the Licensee to take such steps as may be
specified to reimburse purchasers from the Distribution Business for
the excess amounts charged to them, and the Licensee shall comply with
any directions so issued provided that if the excess amounts relate to
allowed security costs paid to any authorised electricity operator, the
Licensee shall not be obliged to make any such reimbursement unless and
until it has recovered such costs from the relevant authorised
electricity operator.
10. No amounts charged by the Licensee under this Condition (whether or not
subsequently required to be reimbursed) shall be taken into account for
the purpose of applying the distribution charge restriction provisions
of Condition 3A.
61
<PAGE>
11. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"allowed security cost" shall have the meaning ascribed to that term in the
Fuel Security Code.
"security period" means a period commencing on the date on which any
direction issued by the Secretary of State under
Section 34(4)(b) of the Act enters effect and
terminating on the date (being not earlier than the
date such direction, as varied, is revoked or
expires) as the Director, after consultation with
such persons (including without limitation, licence
holders liable to be principally affected) as he
shall consider appropriate, may with the consent of
the Secretary of State by notice to all licence
holders determine after having regard to the views of
such persons.
</TABLE>
62
<PAGE>
Condition 3E. Duration of distribution charge restriction conditions
- --------------------------------------------------------------------
1. The distribution charge restriction conditions shall apply so long as
this licence continues in force but shall cease to have effect (in
whole or in part, as the case may be) if the Licensee delivers to the
Director a disapplication request made in accordance with paragraph 2
and:
(a) the Director agrees in writing to the disapplication request;
or
(b) their application (in whole or in part) is terminated by
notice given by the Licensee in accordance with either
paragraph 4 or paragraph 5.
2. A disapplication request pursuant to this Condition shall (a) be in
writing addressed to the Director, (b) specify the distribution charge
restriction conditions (or any part or parts thereof) to which the
request relates and (c) state the date from which the Licensee wishes
the Director to agree that the specified charge restriction conditions
shall cease to have effect.
3. Save where the Director otherwise agrees, no disapplication following
delivery of a disapplication request pursuant to this Condition shall
have effect earlier than that date which is the later of:
(a) a date being not less than 18 months after delivery of the
disapplication request; and
(b) 31 March 2000.
4. If the Director has not made a reference to the Competition Commission
under Section 12 of the Act relating to the modification of the
distribution charge restriction conditions before the beginning of the
period of 12 months which will end with the disapplication date, the
Licensee may deliver written notice to the Director terminating the
application of such charge restriction conditions (or any part or parts
thereof) as are specified in the disapplication request with effect
from the disapplication date or a later date.
63
<PAGE>
5. If the Competition Commission makes a report on a reference made by the
Director relating to the modification of the distribution charge
restriction conditions (or any part or parts thereof) specified in the
disapplication request and such report does not include a conclusion
that the cessation of such charge restriction conditions, in whole or
in part, operates or may be expected to operate against the public
interest, the Licensee may within 30 days after the publication of the
report by the Director in accordance with Section 13 of the Act deliver
to him written notice terminating the application of such charge
restriction conditions with effect from the disapplication date or
later.
6. A disapplication request or notice served under this Condition may be
served in respect of a specified geographic area.
64
<PAGE>
Condition 4. Prohibition of cross-subsidies
- -------------------------------------------
1. The Licensee shall procure that the Distribution Business does not give
any cross-subsidy to, or receive any cross-subsidy from, any other
business of the Licensee or an affiliate or related undertaking of the
Licensee (whether or not a Separate Business).
65
<PAGE>
Condition 5. Basis of charges for use of system, connection to system and
- -------------------------------------------------------------------------
Metering and Data Services: requirements for transparency
- ---------------------------------------------------------
1. The Licensee shall as soon as practicable prepare statements in a form
approved by the Director setting out the basis upon which charges will
be made for the provision of:
(a) use of system; and
(b) connections to the Licensee's Distribution System
in each case in such form and with such detail as shall be necessary to
enable any person to make a reasonable estimate of the charges to which
he would become liable for the provision of such services, and (without
prejudice to the foregoing) including the information set out in
paragraphs 3 and 4 respectively.
2. The Licensee shall as soon as practicable prepare statements in a form
approved by the Director setting out the basis upon which charges will
be made for the provision of each of the Metering and Data Services, in
each case in such form and with such detail as shall be necessary to
enable any person to make a reasonable estimate of the charges to which
he would become liable for the provision of such service and of the
other terms, likely to have a material impact on the conduct of his
business, upon which the service would be provided and (without
prejudice to the foregoing) including the information set out in
paragraph 5.
3. The statement referred to at sub-paragraph 1(a) shall include:
(a) a schedule of charges for the distribution of electricity
under use of system;
66
<PAGE>
(b) a schedule of adjustment factors to be made in respect of
distribution losses, in the form of additional supplies
required to cover those distribution losses;
(c) the methods by which and the principles on which the charges
(if any) for availability of distribution capacity on the
Licensee's Distribution System will be made; and
(d) save to the extent that such matters are included in any
statement prepared in accordance with paragraph 2:
(i) a schedule of charges in respect of meter reading,
accounting and administrative services; and
(ii) a schedule of the charges (if any) which may be made
for the provision and installation of any meters or
electrical plant at entry or exit points, the
provision and installation of which is ancillary to
the grant of use of system, and for the maintenance
of such meters or electrical plant.
4. The statement referred to at sub-paragraph 1(b) shall include (save to
the extent that such matters are included in any statement prepared in
accordance with paragraph 2):
(a) a schedule listing those items (including the carrying out of
works and the provision and installation of electric lines or
electrical plant or meters) of significant cost liable to be
required for the purpose of connection (at entry or exit
points) to the Licensee's Distribution System for which
connection charges may be made or levied and including (where
practicable) indicative charges for each such item and (in
other cases) an explanation of the methods by which and the
principles on which such charges will be calculated;
67
<PAGE>
(b) the methods by which and the principles on which any charges
will be made in respect of extension or reinforcement of the
Licensee's Distribution System rendered (in the Licensee's
discretion) necessary or appropriate by virtue of providing
connection to or use of system to any person seeking
connection;
(c) the methods by which and the principles on which connection
charges will be made in circumstances where the electric
lines or electrical plant to be installed are (at the
Licensee's discretion) of greater size or capacity than that
required for use of system by the person seeking connection;
(d) the methods by which and the principles on which any charges
(including any capitalised charge) will be made for
maintenance, repair, and replacement required of electric
lines, electrical plant or meters provided and installed for
making a connection to the Licensee's Distribution System;
(e) the methods by which and principles on which any charges will
be made for the provision of special metering or telemetry or
data processing equipment by the Licensee for the purposes of
enabling any person which is party to the Pooling and
Settlement Agreement to comply with its obligations in respect
of metering thereunder, or for the performance by the Licensee
of any service in relation thereto; and
(f) the methods by which and principles on which any charges will
be made for disconnection from the Licensee's Distribution
System and the removal of electrical plant, electric lines and
ancillary meters following disconnection.
5. The statements referred to at paragraph 2 shall include a schedule of
charges for each of the Metering and Data Services, together with an
explanation of the methods by which and the principles on which such
charges will be calculated.
68
<PAGE>
6. Use of system charges for those items referred to in paragraph 3 shall
be determined on the same basis as is applied by the Licensee when
determining the use of system element of tariffs fixed pursuant to
Section 18 of the Act and Condition 33.
7. Connection charges for those items referred to in paragraph 4 shall be
set at a level which will enable the Licensee to recover:
(a) the appropriate proportion of the costs directly or
indirectly incurred in carrying out any works, the extension
or reinforcement of the Licensee's Distribution System or the
provision and installation, maintenance, repair, and
replacement or (as the case may be) removal following
disconnection of any electric lines, electrical plant or
meters; and
(b) a reasonable rate of return on the capital represented by such
costs.
8. The Director may, upon the written request of the Licensee, issue a
direction relieving the Licensee of its obligations under paragraph 2
to such extent and subject to such terms and conditions as he may
specify in that direction.
9. The Licensee shall not in setting its charges for or in setting the
other terms that will apply to the provision of any of the Metering and
Data Services restrict, distort or prevent competition in the
generation, distribution or supply of electricity or in the provision
of meter operation, data retrieval, data processing or data aggregation
services.
10. If so requested and subject to paragraphs 11 and 16, the Licensee
shall, as soon as practicable and in any event within 28 days (or where
the Director so approves such longer period as the Licensee may
reasonably require having regard to the nature and complexity of the
request) after the date referred to in paragraph 17 give or send to any
person making such request a statement showing present and future
circuit capacity, forecast power flows and loading on the part or parts
of the Licensee's Distribution System specified in the request and
fault levels for each distribution node covered by the request and
containing:
69
<PAGE>
(a) such further information as shall be reasonably necessary to
enable such person to identify and evaluate the opportunities
available when connecting to and making use of the part or
parts of the Licensee's Distribution System specified in the
request; and
(b) if so requested, a commentary prepared by the Licensee
indicating the Licensee's views as to the suitability of the
part or parts of the Licensee's Distribution System specified
in the request for new connections and the distribution of
further quantities of electricity.
11. The Licensee shall include in every statement given or sent under
paragraph 10 the information required by that paragraph
except that the Licensee may:
(a) with the prior consent of the Director omit from any such
statement any details as to circuit capacity, power flows,
loading or other information, disclosure of which would, in
the view of the Director, seriously and prejudicially affect
the commercial interests of the Licensee or any third party;
and
(b) omit information the disclosure of which would place the
Licensee in breach of Condition 14.
12. The Licensee may periodically review the information set out in and,
with the approval of the Director, alter the form of the statements
prepared in accordance with paragraphs 1 and 2 and shall, at least once
in every year this Licence is in force, make any necessary revisions to
such statements in order that the information set out in the statements
shall continue to be accurate in all material respects.
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13. The Licensee shall send a copy of the statements prepared in accordance
with paragraphs 1 and 2, and of each revision of such statements in
accordance with paragraph 12, to the Director.
14. The Licensee shall give or send a copy of the statements prepared in
accordance with paragraphs 1 and 2, or (as the case may be) of the
latest revision of such statements in accordance with paragraph 12, to
any person who requests a copy of such statement or statements.
15. The Licensee may make a charge for any statement given or sent pursuant
to paragraph 14 of an amount which shall not exceed the amount
specified in directions issued by the Director for the purposes of this
Condition based on the Director's estimate of the Licensee's reasonable
costs of providing such a statement.
16. The Licensee may within 10 days after receipt of the request provide an
estimate of its reasonable costs in the preparation of any statement
referred to in paragraph 10, and its obligation to provide such
statement shall be conditional on the person requesting such statement
agreeing to pay the amount estimated or such other amount as the
Director may, upon application of the Licensee or the person requesting
such statement, direct.
17. For the purposes of paragraph 10, the date referred to shall be the
latest of:
(a) the date of receipt of the request referred to in paragraph
10; or
(b) the date on which the Licensee receives agreement from the
person making the request to pay the amount estimated or such
other amount as is determined by the Director (as the case
may be) under paragraph 16.
18. The Licensee shall, not less than 5 months prior to the date on which
it proposes to amend its use of system charges in respect of any
agreement for use of system, send to the Director a notice setting out
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the Licensee's proposals in relation to such amendment together with an
explanation of the proposed amendment (including a statement of any
assumptions on which such proposals are based), and the Licensee shall
send a copy of such notice to any person who has entered into an
agreement for use of system under Condition 5B.
19. Except with the prior consent of the Director, the Licensee shall not
amend its use of system charges in respect of any agreement for use of
system save to the extent that it has given prior notice of the
amendment in accordance with paragraph 18 and such amendment reflects
the proposals made in the notice (subject only to revisions consequent
upon material changes in the matters which were expressed, in the
statement which accompanied the notice, to be assumptions on which the
proposals were based).
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Condition 5A. Non-discrimination in the provision of use of system, connection
- ------------------------------------------------------------------------------
to system and Metering and Data Services
- -----------------------------------------
1. In the carrying out of works for the purpose of connection to the
Licensee's Distribution System, in providing for the retention of a
connection to its Distribution System, or in the provision of any of
the Metering and Data Services, the Licensee shall not discriminate:
(a) between any persons or class or classes of persons; or
(b) as between the Licensee (in the provision of connections or
Metering and Data Services by the Licensee as part of its
Distribution Business to itself for the purpose of its Supply
or Second Tier Supply Business) and any person or class or
classes of persons.
2. In the provision of use of system the Licensee shall not discriminate:
(a) between any Authorised Electricity Operators or class or
classes thereof; or
(b) as between the Licensee (in the provision of use of system
by the Licensee as part of its Distribution Business to itself
for the purpose of its Supply or Second Tier Supply Business)
and any Authorised Electricity Operator or class or classes
thereof.
3. Without prejudice to paragraphs 1 and 2, and subject to the provisions
of Condition 5, the Licensee shall not:
(a) make charges for the provision of use of system to any
Authorised Electricity Operator or class or classes thereof
which differ from the charges for such provision:
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<PAGE>
(i) to any other Authorised Electricity Operator or to
any class or classes thereof; or
(ii) to the Licensee (in the provision of use of system
by the Licensee as part of its Distribution Business
to itself for the purposes of the Supply Business or
the Second Tier Supply Business); or
(b) make charges for the provision of any of the Metering and Data
Services to any person or class or classes thereof which
differ from the charges for such provision:
(i) to any other person or class or classes of person; or
(ii) to the Licensee (in the provision of such Metering
and Data Services by the Licensee as part of its
Distribution Business to itself for the purposes of
the Supply Business or the Second Tier Supply
Business)
except in so far as such differences reasonably reflect differences in
the costs associated with such provision.
4. The Licensee shall not in setting its charges for use of system
restrict, distort or prevent competition in the generation,
distribution or supply of electricity.
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<PAGE>
Condition 5B. Requirement to offer terms for use of system, connection and the
- ------------------------------------------------------------------------------
provision of Metering and Data Services
- ---------------------------------------
1. On application made by any Authorised Electricity Operator the Licensee
shall (subject to paragraph 10) offer to enter into an agreement for
use of system:
(a) to accept into the Licensee's Distribution System at such
entry point or points and in such quantities as may be
specified in the application, electricity to be provided by or
on behalf of such Authorised Electricity Operator; and/or
(b) to distribute such quantities of electricity as are referred
to in sub-paragraph (a) (less any distribution losses) at such
exit point or points on the Licensee's Distribution System and
to such person or persons as the Authorised Electricity
Operator may specify; and
(c) containing (where appropriate) the provisions referred to in
paragraph 2 of Condition 22;
(d) including terms requiring and entitling the Authorised
Electricity Operator to act (where appropriate) as agent of
the Licensee in order to procure an agreement on the Standard
Terms of Connection between the Licensee and each customer of
the Authorised Electricity Operator at premises which are to
be supplied with electricity through an established
connection; and
(e) where the applicant is an Exempt Supplier, requiring such
Exempt Supplier either to enter into an agreement with the
Licensee for exempt supply services or to enter into an
equivalent agreement with another Electricity Supplier.
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<PAGE>
2. On application made by any person, the Licensee shall (subject to
sub-paragraphs 10(a) and (b)) offer to enter into an agreement for the
provision of a connection or for the modification of an existing
connection to the Licensee's Distribution System and such offer shall
make detailed provision regarding:
(a) the carrying out of works (if any) required to connect the
Licensee's Distribution System to any other system for the
transmission or distribution of electricity, and for the
obtaining of any consents necessary for such purpose;
(b) the carrying out of works (if any) in connection with the
extension or reinforcement of the Licensee's Distribution
System rendered (in the Licensee's discretion) appropriate or
necessary by reason of making the connection or modification
to an existing connection and for the obtaining of any
consents necessary for such purpose;
(c) (save to the extent that such matters are included in any
agreement offered in accordance with paragraph 3) the
installation of appropriate meters (if any) required to enable
the Licensee to measure electricity being accepted into the
Licensee's Distribution System at the specified entry point or
points or leaving such system at the specified exit point or
points; and
(d) the installation of such switchgear or other apparatus (if any)
as may be required for the interruption of supply where the
person seeking connection or modification of an existing
connection does not require the provision by the Licensee of
top-up or standby supplies or sales of electricity;
(e) (save to the extent that such matters are included in any
agreement offered in accordance with paragraph 3) the
installation of special metering, telemetry or data processing
(if any) for the purpose of enabling any person which is party
to the Pooling and Settlement Agreement to comply with its
obligations in respect to metering or the performance by the
Licensee of any service in relation to such metering
thereunder.
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<PAGE>
3. On application made by any private electricity supplier, or in the case
of sub-paragraphs (a) and (b) by any person, the Licensee shall
(subject to sub-paragraph 10(a)) offer to enter into an agreement for
the provision within its authorised area of such of the following
services as may be required:
(a) the provision of metering equipment whether, at the discretion
of the Licensee, by way of sale, hire or loan ("meter
provision services");
(b) the installation, commissioning, testing,repair and
maintenance of metering equipment ("meter operation services");
(c) the retrieval and verification of meter reading data from
electricity meters and the delivery of such data to any
relevant person for the purpose of data processing
("data retrieval services");
(d) the:
(i) processing, validation and (where necessary)
estimation of meter reading data; and
(ii) creation, processing and validation of data in respect
of the consumption of electricity at premises which
receive an unmetered supply,
and in each case the delivery of such data to any relevant person
for the purpose of data aggregation ("data processing services");
and
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<PAGE>
(e) the collation and summation of meter reading data (whether
actual or estimated) and of data in respect of the consumption
of electricity at premises which receive an unmetered supply,
and the delivery of such data to any relevant person for
settlement purposes ("data aggregation services").
4. On application made by any Electricity Supplier the Licensee shall
(subject to sub-paragraph 10(a)) offer to provide metering point
administration services within its authorised area pursuant to and in
accordance with the Master Registration Agreement.
5. On application made by any person the Licensee shall (subject to
sub-paragraph 10(a)) offer to enter into an agreement for the provision
of data transfer services.
6. In making an offer pursuant to this Condition to enter into any
agreement, the Licensee shall set out:
(a) the date by which:
(i) in the case of an agreement under paragraph 3, 4 or 5, the
services required shall be provided; or
(ii) in the case of an agreement under paragraph 2, any
works required to permit access to the Licensee's
Distribution System (including for this purpose any
works to reinforce or extend the Licensee's
Distribution System) shall be completed
(in each case, unless otherwise agreed between parties,
time being of the essence);
(b) the charges to be paid in respect of the services required,
such charges (unless manifestly inappropriate):
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<PAGE>
(i) to be presented in such a way as to be referable to
the statements prepared in accordance with paragraphs
1 and 2 of Condition 5 or any revision thereof;
(ii) to be set in conformity with the requirements of
Condition 5; and
(iii) in the case of an agreement under paragraph 2,
additionally to be set in conformity with the
requirements of paragraph 7; and
(c) such other detailed terms in respect of each of the services
required as are or may be appropriate for the purpose of the
agreement.
7. For the purpose of determining an appropriate proportion of the costs
directly or indirectly incurred in carrying out works under an
agreement for making a connection or modification to an existing
connection, the Licensee shall have regard to:
(a) the benefit (if any) to be obtained or likely in the future
to be obtained by the Licensee or any other person as a result
of the carrying out of such works whether by reason of the
reinforcement or extension of the Licensee's Distribution
System or the provision of additional entry or exit points on
such system or otherwise;
(b) the ability or likely future ability of the Licensee to
recoup a proportion of such costs from third parties; and
(c) the principles that:
(i) no charge will normally be made for reinforcement of
the existing Distribution System if the new or
increased load requirement does not exceed 25 per cent
of the existing effective capacity at the relevant
points on the system; and
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<PAGE>
(ii) charges will not generally take into account system
reinforcement carried out at more than one voltage
level above the voltage of connection.
8. The Licensee shall offer terms for agreements in accordance with
paragraphs 1 to 5 as soon as practicable and (save where the Director
consents to a longer period) in any event not more than the period
specified in paragraph 9 after receipt by the Licensee (or its agent)
from any person of an application containing all such information as
the Licensee may reasonably require for the purpose of formulating the
terms of the offer.
9. For the purposes of paragraph 8, the period specified shall be:
(a) in the case of persons seeking the provision of any service
under paragraphs 3 to 5, or use of system only, 28 days;
(b) in the case of persons seeking connection or a modification
to an existing connection, 3 months; and
(c) in the case of persons seeking use of system in conjunction
with connection, 3 months.
10. The Licensee shall not be obliged pursuant to this Condition to offer
to enter or to enter into any agreement:
(a) under paragraphs 1 to 5, if to do so would be likely to
involve the Licensee being:
(i) in breach of its duties under section 9 of the Act;
(ii) in breach of the Electricity Supply Regulations 1988 or
of any regulations made under section 29 of the Act or
of any other enactment relating to safety or standards
applicable in respect to the Distribution Business;
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<PAGE>
(ii in breach of the Grid Code or the Distribution Code; or
(iv) in breach of the Conditions;
(b) under paragraph 1 or 2, if the person making the application
does not undertake to be bound, in so far as applicable, by the
terms of the Distribution Code or the Grid Code from time to
time in force; or
(c) under paragraph 1, if the person making the application
ceases to be an Authorised Electricity Operator.
11. The Licensee shall within 28 days following receipt of a request from
any person, give or send to such person such information in the
possession of the Licensee as may be reasonably required by such person
for the purpose of completing paragraph 8 of Part 1 and paragraphs 2(v)
and (vi) of Part 2 of Schedule 2 to The Electricity (Application for
Licences and Extensions of Licences) Regulations 1990 or such
provisions to like effect contained in any further regulations then in
force made pursuant to sections 6(3), 60 and 64(1) of the Act.
12. The Licensee shall undertake each of the services referred to in
paragraphs 3 to 5 in the most efficient and economic manner practicable
having regard to the alternatives available and the other requirements
of this Licence and of the Act in so far as they relate to the
provision of those services.
13. In the provision of any of the services referred to in paragraphs 3 to
5 the Licensee shall not restrict, distort or prevent competition in
the supply of electricity.
14. The services referred to in paragraphs 3 to 5 shall collectively be
described as Metering and Data Services.
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<PAGE>
Condition 5C. Requirement to offer Standard Terms of Connection
- ---------------------------------------------------------------
1. The Licensee shall, within 28 days after this Condition has come into
force, prepare and submit to the Director for his approval the standard
terms of an agreement (the "Standard Terms of Connection") to provide,
as between the Licensee and any customer, for the retention of an
established connection at premises which are to be supplied with
electricity through such a connection.
2. The Licensee may, subject to the approval of the Director, prepare
different Standard Terms of Connection for different cases or classes
of customer or premises, clearly identifying the criteria used to
distinguish between such cases or classes.
3. The Licensee shall from time or time, and whenever requested to do so
by the Director, review the Standard Terms of Connection with a view to
determining whether any revision should be made to such terms, and in
the course of the review the Licensee shall consult with the Relevant
Consumers' Committee, all other public electricity suppliers and all
Second Tier Suppliers which supply electricity within the authorised
area.
4. At the conclusion of any review in accordance with paragraph 3 the
Licensee shall submit to the Director:
(a) a proposal for the revision of the Standard Terms of
Connection (or, where the Licensee considers it appropriate in
all the circumstances, a proposal that no revision should be made
to the Standard Terms of Connection); and
(b) the reasons for its proposal, together with a summary of
responses received from such parties as were consulted by the
Licensee.
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<PAGE>
5. A proposal made by the Licensee in accordance with paragraph 4 shall
require to be approved by the Director and, following such approval in
writing, the Licensee shall accordingly revise (or, as the case may be,
shall make no revision to) the Standard Terms of Connection.
6. The Licensee shall, in such manner as will in the opinion of the
Licensee secure adequate publicity therefor:
(a) publish, no later than 31 December 1997, the Standard Terms of
Connection approved by the Director in accordance with
paragraph 1; and
(b) publish, within 21 days after receiving the approval of the
Director, any revision to the Standard Terms of Connection in
accordance with paragraph 5.
7. The Licensee may at any time agree with any person (by way of variation
to the Standard Terms of Connection) terms for the retention of a
particular established connection which differ from the Standard Terms
of Connection where such different terms are appropriate in all the
circumstances.
8. The Licensee shall not do anything to prevent the conclusion of an
agreement on the Standard Terms of Connection between itself and a
customer of any Authorised Electricity Operator which is acting as
agent for the Licensee in accordance with an agreement for use of
system.
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<PAGE>
Condition 5D. Functions of the Director
- ---------------------------------------
1. If, after a period which appears to the Director to be reasonable for
the purpose, the Licensee has failed to enter into an agreement with
any person entitled or claiming to be entitled thereto pursuant to a
request under Condition 5B or Condition 5C, the Director may, on the
application of such person or the Licensee, settle any terms of the
agreement in dispute between the Licensee and that person in such
manner as appears to the Director to be reasonable having (in so far as
relevant) regard in particular to the following considerations:
(a) that such person should pay to the Licensee:
(i) in the case of provision of use of system, the use of
system charges determined in accordance with paragraph
6 of Condition 5; and
(ii) in the case of provision of a connection or a
modification to an existing connection to the system,
the whole or an appropriate proportion (as determined in
accordance with paragraph 7 of Condition 5B) of the
costs referred to in sub-paragraph 7(a) of Condition 5,
together with a reasonable rate of return on the capital
represented by such costs;
(iii) in the case of provision of any of the Metering and
Data Services, the whole or the appropriate proportion
of such sum as is determined in accordance with
paragraph 9 of Condition 5;
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(b) that the performance by the Licensee of its obligations under
the agreement should not cause it to be in breach of those
provisions referred to at sub-paragraph 10(a) of Condition 5B;
(c) that any methods by which the Licensee's Distribution System is
connected to any other system for the transmission or
distribution of electricity accord (in so far as applicable to
the Licensee) with the Distribution Code and with the Grid
Code; and
(d) that the terms and conditions of the agreement so settled by
the Director and of any other agreements entered into by the
Licensee pursuant to a request under Condition 5B or Condition
5C should be, so far as circumstances allow, in as similar a
form as is practicable.
2. In so far as any person entitled or claiming to be entitled to an offer
under Condition 5B or Condition 5C wishes to proceed on the basis of
the agreement as settled by the Director, the Licensee shall forthwith
enter into and implement such agreement in accordance with its terms.
3. If either party to such agreement proposes to vary the contractual
terms of any agreement for use of system, for the provision of a
connection or for the modification of an existing connection to the
Licensee's Distribution System, for the retention of an established
connection to such Distribution System, or for the provision of any of
the Metering and Data Services entered into pursuant to Condition 5B,
Condition 5C or this Condition in any manner provided for under such
agreement, the Director may, at the request of that party, settle any
dispute relating to such variation in such manner as appears to the
Director to be reasonable.
4. The Director may (following consultation with the Licensee) issue
directions relieving the Licensee of its obligations under Condition 5B
relating to Metering and Data Services in respect of such parts of that
Condition and to such extent as may be specified in the directions.
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Condition 6. Distribution system planning standard and quality of service
- -------------------------------------------------------------------------
1. The Licensee shall plan and develop the Licensee's Distribution System
in accordance with a standard not less than that set out in Engineering
Recommendation P.2/5 (October 1978 revision) of the Electricity Council
Chief Engineers' Conference in so far as applicable to it or such other
standard of planning as the Licensee may, following consultation (where
appropriate) with the Transmission Company and any other Authorised
Electricity Operator liable to be materially affected thereby and with
the approval of the Director, adopt from time to time.
2. The Licensee shall within 3 months after this Licence enters into force
draw up and submit to the Director for his approval a statement setting
out criteria by which the quality of performance of the Licensee in
maintaining distribution system security and availability and quality
of service may be measured.
3. The Licensee shall within 2 months after the end of each financial year
submit to the Director a report providing details of the performance of
the Licensee during the previous financial year against the criteria
referred to in paragraph 2.
4. The Director may (following consultation with the Licensee and, where
appropriate, with the Transmission Company and any other Authorised
Electricity Operator liable to be materially affected thereby) issue
directions relieving the Licensee of its obligation under paragraph 1
in respect of such parts of the Licensee's Distribution System and to
such extent as may be specified in the directions.
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Condition 7. Security and Safety of Supplies Enquiry Service
- ------------------------------------------------------------
1. The Licensee shall establish and operate an enquiry service for use by
any person for the purposes of receiving reports and offering
information, guidance or advice about any matter or incident that:
(a) causes danger or requires urgent attention, or is likely to
cause danger or require urgent attention, in relation to the
supply or distribution of electricity in the Licensee's
authorised area; or
(b) affects or is likely to affect the maintenance of the
security, availability and quality of service of the
Licensee's Distribution System.
2. The service established by the Licensee in accordance with paragraph 1
shall:
(a) be provided without charge by the Licensee to the user at the
point of use;
(b) ensure that all reports and enquiries are processed in a
prompt and efficient manner whether made by telephone, in
writing or in person;
(c) be available to receive and process telephone reports and
enquiries at all times on every day of each year; and
(d) be operational no later than 31 March 1998.
3. In the establishment and operation of the enquiry service in accordance
with paragraph 1 the Licensee shall not discriminate:
(a) between any persons or class or classes thereof; or
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(b) between the Licensee (in the provision of such services by the
Licensee as part of its Distribution Business to itself for
the purpose of its Supply Business) and any private
electricity supplier or any customer thereof.
4. In the establishment and operation of the enquiry service in accordance
with paragraph 1 the Licensee shall not restrict, distort or prevent
competition in the supply of electricity.
5. The Licensee shall by 1 January 1998 prepare and submit to the Director
for his approval a statement setting out details of the service to be
provided in accordance with paragraph 1, and the Licensee shall,
following the Director's approval, give or send a copy of such
statement to any person requesting it.
6. The Licensee shall give to the Director notice of any amendments it
proposes to make to the statement prepared under paragraph 5, and shall
not make such amendments until either:
(a) a period of one month from the date of the notice has expired;
or
(b) prior to the expiry of such period, the Licensee has obtained
the written approval of the Director to the amendments.
7. The Licensee shall take steps to inform each Authorised Electricity
Operator which uses the service of any change to the address or
telephone number of the service established in accordance with
paragraph 1 as soon as is practicable prior to such change becoming
effective.
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Condition 8. Provision of information about theft, damage and meter interference
- --------------------------------------------------------------------------------
1. Where a person other than the Licensee is the owner of any electrical
plant, electric lines or meter the Licensee shall, as soon as is
reasonably practicable, inform that person of any incident where it has
reason to believe:
(a) there has been damage to such electrical plant, electric line
or meter; or
(b) there has been interference with the meter to alter its
register or prevent it from duly registering the quantity of
electricity supplied.
2. Where the Licensee, in the course of providing services on behalf of
its Distribution Business to any other person supplying electricity to
premises within the authorised area, has reason to believe that:
(a) there has been damage to any electrical plant, electric line
or meter through which such premises are supplied with
electricity; or
(b) there has been interference with the meter through which such
premises are supplied to alter its register or prevent it from
duly registering the quantity of electricity supplied
the Licensee shall, as soon as reasonably practicable, inform that
person of the incident in question.
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Condition 9. Provisions relating to the connection of metering equipment
- ------------------------------------------------------------------------
1. On application made by any person the Licensee shall, subject to
paragraph 5, offer to enter into an agreement authorising that person
to connect metering equipment to the Licensee's Distribution System.
2. In making an offer to enter into an agreement specified in paragraph 1,
the Licensee shall set out:
(a) the date from which the applicant is authorised to undertake
connections;
(b) the procedures to be adopted by the applicant when making
connections, with particular regard to those relating to
safety; and
(c) such other detailed terms as are or may be appropriate for the
purposes of the agreement.
3. The Licensee shall offer terms for agreements in accordance with
paragraph 1 as soon as practicable and (save where the Director
consents to a longer period) in any event not more than 28 days after
receipt by the Licensee from any person of an application containing
all such information as the Licensee may reasonably require for the
purpose of formulating the terms of the offer.
4. In the offering of the terms in accordance with paragraph 1, the
Licensee shall not show undue preference to or exercise undue
discrimination against any person or class of persons.
5. The Licensee shall not be obliged pursuant to this Condition to
offer to enter or to enter into any agreement:
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<PAGE>
(a) (in respect of non-half-hourly metering equipment) which comes
into effect prior to 1 April 2000; or
(b) where to do so would be likely to cause the Licensee to be in
breach of those provisions referred to at sub-paragraph 10(a)
of Condition 5B.
6. If, after a period which appears to the Director to be reasonable for
the purpose, the Licensee has failed to enter into an agreement with
any person entitled or claiming to be entitled thereto pursuant to a
request under this Condition, the Director may, on the application of
such person or the Licensee, settle any terms of the agreement in
dispute between the Licensee and that person in such manner as appears
to the Director to be reasonable.
7. In so far as any person entitled or claiming to be entitled to an offer
under this Condition wishes to proceed on the basis of the agreement as
settled by the Director, the Licensee shall forthwith enter into and
implement such agreement in accordance with its terms.
8. If the Licensee or other party to such agreement proposes to vary the
terms of any agreement entered into pursuant to this Condition in any
manner provided for under such agreement, the Director may, at the
request of the Licensee or other party to such agreement, settle any
dispute relating to such variation in such manner as appears to the
Director to be reasonable.
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Condition 10. Generation Security Standard
- ------------------------------------------
1. The Licensee shall make arrangements sufficient to meet the generation
security standard.
2. The duty imposed by paragraph 1 shall be discharged either by the
Licensee complying with the provisions of paragraph 3 below or by the
making by the Licensee of such other arrangements as may have been
previously approved in writing for the purpose by the Director.
3. The Licensee may discharge the duty imposed by paragraph 1 by for so
long as the relevant condition is met, and save by reason of planned
maintenance undertaken on the Licensee's Distribution System or in
circumstances of force majeure affecting either the Licensee's
Distribution System or the quantities of electricity delivered into
that system, not:
(a) making voltage reductions outside statutory limits; or
(b) interrupting or reducing supplies to any qualifying customer
otherwise than as instructed pursuant to the Grid Code by the
Transmission Company or in accordance with the Distribution Code.
4. The relevant condition referred to in paragraph 3 is that there should
at any relevant time be electricity available to be purchased under the
terms of the Pooling and Settlement Agreement at a price less than the
ceiling price.
5. The Licensee shall upon request by the Director provide to the Director
such information as the Director may require for the purpose of
monitoring compliance with this Condition and to enable the Director
(having regard to his statutory duties) to review the operation of the
generation security standard.
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6. The provisions of this Condition are without prejudice to the duties of
the Licensee under the Electricity Supply Regulations 1988.
7. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"ceiling price" means such price as
would be equal to the Pool
Selling Price in
circumstances where the
corresponding Pool Purchase
Price was an amount equal to
the Value of Lost Load.
"generation security standard" means such standard of generation security as will
ensure that:
(a) the supply of electricity to qualifying
customers will not be discontinued in more
than 9 years in any 100 years; and
(b) the voltage or frequency of
electricity supplied to qualifying
customers will not be reduced below
usual operational limits in more than
30 years in any 100 years
by reason of insufficiency of electricity generation
available for the purposes of supply by the Licensee
to its qualifying customers at times of annual system
peak demand.
"Pool Purchase Price" and shall each have the meaning "Pool Selling from time to
time ascribed Price" to them in Schedule 9 to the
Pooling and Settlement Agreement.
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"qualifying customer" means any purchaser from the Licensee entitled
and requiring at any time to be supplied by the Licensee
at premises within the authorised area of the
Licensee but shall exclude:
(a) a contract purchaser under an
interruptible contract or a
contract containing load management
terms to the extent that supplies to
that purchaser may be interrupted or
reduced in accordance with the
terms of that contract; and
(b) a tariff customer on special tariffs
which restrict supplies to
particular time periods to the
extent that supplies to that customer may
be interrupted or reduced in
accordance with such tariff.
"Value of Lost Load" means in respect of the first financial year, the sum
of(pound)2 per kWh and, in respect of each succeeding
financial year, the sum which corresponds to(pound)2 per kWh
as adjusted to reflect the percentage change in the
Retail Price Index between the index published or
determined in respect to the December prior to the
start of that financial year and the index published or
determined for December 1989.
</TABLE>
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Condition 11. Distribution Code
- -------------------------------
1. The Licensee shall in consultation with Authorised Electricity
Operators liable to be materially affected thereby prepare and at all
times have in force and shall implement and (subject to paragraph 10 of
this Condition) comply with a Distribution Code:
(a) covering all material technical aspects relating to connections
to and the operation and use of the Licensee's Distribution
System or (in so far as relevant to the operation and use of
the Licensee's Distribution System) the operation of
electric lines and electrical plant connected to the Licensee's
Distribution System or the distribution system of any
Authorised Electricity Operator and (without prejudice to the
foregoing) making express provision as to the matters referred
to in paragraph 5 below; and
(b) which is designed so as:
(i) to permit the development, maintenance and operation of
an efficient, co-ordinated and economical system for the
distribution of electricity; and
(ii) to facilitate competition in the generation and supply
of electricity.
2. The Distribution Code in force at the date this Licence enters force
shall be sent to the Director for his approval. Thereafter the Licensee
shall (in consultation with Authorised Electricity Operators liable to
be materially affected thereby) periodically review (including upon the
request of the Director) the Distribution Code and its implementation.
Following any such review, the Licensee shall send to the Director:
(a) a report on the outcome of such review; and
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(b) any proposed revisions to the Distribution Code from time to
time as the Licensee (having regard to the outcome of such
review) reasonably thinks fit for the achievement of the
objectives referred to in sub-paragraph 1 (b); and
(c) any written representations or objections from Authorised
Electricity Operators (including any proposals by such
operators for revisions to the Distribution Code not accepted
by the Licensee in the course of the review) arising during
the consultation process and subsequently maintained.
3. Revisions to the Distribution Code proposed by the Licensee and sent to
the Director pursuant to paragraph 2 shall require to be approved by
the Director.
4. Having regard to any written representations or objections referred to
in sub-paragraph (c) of paragraph 2, and following such further
consultation (if any) as the Director may consider appropriate, the
Director may issue directions requiring the Licensee to revise the
Distribution Code in such manner as may be specified in the directions,
and the Licensee shall forthwith comply with any such directions.
5. The Distribution Code shall include:
(a) a distribution planning and connection code containing:
(i) connection conditions specifying the technical, design
and operational criteria to be complied with by any
person connected or seeking connection with the
Licensee's Distribution System; and
(ii) planning conditions specifying the technical and design
criteria and procedures to be applied by the Licensee in
the planning and development of the Licensee's
Distribution System and to be taken into account by
persons connected or seeking connection with the
Licensee's Distribution System in the planning and
development of their own plant and systems; and
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(b) a distribution operating code specifying the conditions
under which the Licensee shall operate the Licensee's
Distribution System and under which persons shall operate
their plant and/or distribution systems in relation to the
Licensee's Distribution System, in so far as necessary to
protect the security and quality of supply and safe operation
of the Licensee's Distribution System under both normal and
abnormal operating conditions.
6. The Licensee shall give or send a copy of the Distribution Code (as
from time to time revised) to the Director.
7. The Licensee shall (subject to paragraph 8) give or send a copy of the
Distribution Code (as from time to time revised) to any person
requesting the same.
8. The Licensee may make a charge for any copy of the Distribution Code
(as from time to time revised) given or sent pursuant to paragraph 7 of
an amount which will not exceed any amount specified for the time being
for the purposes of this Condition in directions issued by the
Director.
9. In preparing, implementing and complying with the Distribution Code
(including in respect of the scheduling of maintenance of the
Licensee's Distribution System), the Licensee shall not unduly
discriminate against or unduly prefer:
(a) any one or any group of persons; or
(b) the Licensee in the conduct of any business other than the
Distribution Business
in favour of or as against any one other or any other group of persons.
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10. The Director may (following consultation with the Licensee) issue
directions relieving the Licensee of its obligations under the
Distribution Code in respect of such parts of the Licensee's
Distribution System and to such extent as may be specified in the
directions.
11. Compliance with this Condition shall not require the Licensee to impose
any contractual obligation on tariff customers to comply with the
Distribution Code (as from time to time revised).
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Condition 12. The Metering Point Administration Service and the Master
- ----------------------------------------------------------------------
Registration Agreement
- ----------------------
1. The Licensee shall establish, and shall subsequently operate and
maintain, a service to be known as the Metering Point Administration
Service.
2. The Metering Point Administration Service shall, within
the authorised area, fulfil the following functions:
(a) the maintenance of such a register of technical and other data
as is necessary to facilitate supply by any Electricity
Supplier or Exempt Supplier to all premises within the
authorised area and to meet the reasonable requirements of
Electricity Suppliers in respect of such premises for
information for settlement purposes, including (where so
required):
(i) the identity of the Electricity Supplier responsible
under the Pooling & Settlement Agreement for the
supply to each such premises;
(ii) the type of metering equipment installed at each such
premises; and
(iii) the address of each such premises;
(b) the amendment of the register maintained in accordance with
sub-paragraph (a) to reflect changes of supplier in respect of
any premises;
(c) the provision, in a timely and efficient manner, of such data
contained in the register as is reasonably required and
requested to:
(i) any Electricity Supplier or agent thereof;
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(ii) any person identified in the Pooling and Settlement
Agreement as an appropriate person for the receipt of
data for settlement purposes; and
(iii) any person identified in the Master Registration
Agreement as entitled to such data for the purpose of
facilitating changes of supplier in respect of any
premises; and
(d) the maintenance of an enquiry service for the provision to any
customer of an Electricity Supplier, on request and free of
charge to that customer, of such data contained in the
register as is relevant to the supply of electricity to
premises which are (or are to be) owned or occupied by the
customer, and the taking of such steps as will in the opinion
of the Licensee secure adequate publicity for the operation of
the enquiry service.
3. In fulfilling its obligation in accordance with paragraph 1 the
Licensee shall not restrict, distort or prevent competition in the
provision of meter operation, data retrieval, data processing, data
aggregation or prepayment meter services.
4. The Licensee shall use its best endeavours, in conjunction and
co-operation with all other public electricity suppliers, to prepare a
form of agreement to be known as the Master Registration Agreement.
5. The Master Registration Agreement shall be an agreement made between:
(a) on the one part, the Licensee and all other public electricity
suppliers in their capacity as providers of metering point
administration services; and
(b) on the other part, all Electricity Suppliers who require the
provision of metering point administration services from at
least one public electricity supplier, together with such
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<PAGE>
other persons as are, for settlement purposes, appropriate
parties to the agreement
and shall comprise all the matters set out at paragraph 6.
6. The Master Registration Agreement shall comprise:
(a) terms for the provision of metering point administration
services in accordance with the requirements of paragraph 2
and the equivalent requirements in the licences of all other
public electricity suppliers;
(b) provisions to facilitate, and procedures and practices to be
followed by Electricity Suppliers in relation to changes of
Electricity Supplier in respect of any premises;
(c) a catalogue of definitions, flows and forms of such data as
may require to be transferred by or to parties to the Master
Registration Agreement, or as between any persons for
settlement purposes or for any related purposes (the "Data
Transfer Catalogue");
(d) arrangements for the variation of the Master Registration
Agreement following consultation with the parties, or
representatives of the parties, to that agreement;
(e) provisions (which shall require to be approved in advance by
the Director) by virtue of which the whole or specified parts
of the Master Registration Agreement shall not be capable of
variation without the prior approval of the Director; and
(f) such other matters as are or may be appropriate for the
development, maintenance and operation of an efficient,
co-ordinated and economical system for the supply of
electricity and for the purpose of facilitating competition in
electricity supply.
7. The Licensee shall be a party to and shall comply with the provisions
of the Master Registration Agreement.
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<PAGE>
Condition 13. Establishment of a Data Transfer Service
- -------------------------------------------------------
1. The Licensee shall use its best endeavours, in conjunction and
co-operation with all other public electricity suppliers:
(a) to establish, or to procure the establishment by a third party
of, a service to be known as the Data Transfer Service; and
(b) subsequently to operate and maintain, or to procure the
subsequent operation and maintenance by a third party of such
Data Transfer Service in accordance with the provisions of
this Condition.
2. The Data Transfer Service shall:
(a) provide a network over which may be made all of the electronic
data transfers specified at paragraph 3;
(b) operate and maintain that network; and
(c) provide a connection to that network, on request, to any
person who is or will be a party to any of the electronic data
transfers specified at paragraph 3.
3. The electronic data transfers specified at this paragraph are those
which are reasonably required for any of the purposes set out at
paragraph 4 and which are made between:
(a) a Metering Point Administration Service (MPAS) Operator and an
Electricity Supplier (including the Licensee acting in the
course of its Supply Business) or any agent thereof;
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<PAGE>
(b) an MPAS Operator and any person identified in the Pooling and
Settlement Agreement or the Settlement Agreement for Scotland
as an appropriate person for the receipt of data from the MPAS
Operator for settlement purposes;
(c) the Electricity Pool of England and Wales or Scottish
Electricity Settlements Limited (or any agent thereof) and an
Electricity Supplier (or any agent thereof);
(d) an Electricity Supplier (or any agent thereof) and another
Electricity Supplier (or any agent thereof);
(e) an Electricity Supplier and any of its agents;
(f) different agents of the same Electricity Supplier;
(g) public electricity suppliers (or their agents) and generators
(or their agents) which are parties to the Settlement
Agreement for Scotland; and
(h) Scottish Electricity Settlements Limited (or any agent
thereof) and generators which are parties to the Settlement
Agreement for Scotland.
4. The purposes of this paragraph are:
(a) meeting obligations with respect to the transfer of data for
settlement purposes;
(b) communicating meter reading and meter standing data;
(c) facilitating the provision of metering point administration
services;
(d) communicating distribution use of system information; and
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(e) fulfilling such other requirements relating to the transfer of
data as may be requisite for the supply of electricity to
customers and compliance by Electricity Suppliers with the
Master Registration Agreement.
5. The Data Transfer Service shall, where relevant, transmit data in a
form which complies with the provisions of the Data Transfer Catalogue.
6. In fulfilling its obligation under paragraph 1 the Licensee shall not,
or (if appropriate) shall ensure that the third party shall not,
restrict, distort or prevent competition in the provision of meter
operation, data retrieval, data processing, data aggregation or
prepayment meter services.
7. Any obligation placed on the Licensee under Condition 5 to 5B and
Condition 5D in respect of the provision of data transfer services
shall (for the purposes of those Conditions) be treated as a
requirement on the Licensee to use its best endeavours, in conjunction
and co-operation with all other public electricity suppliers, to fulfil
that obligation or to procure the fulfilment of that obligation by a
third party, and Condition 5 to 5B and Condition 5D shall apply mutatis
mutandis to the provision of data transfer services.
8. Further, in relation to the provision of data transfer services the
reference at paragraph 1 of Condition 5D to the Licensee failing to
enter into an agreement shall be a reference to the Licensee, in
conjunction with all other public electricity suppliers, failing to
enter into or failing to procure that a third party enters into an
agreement.
9. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"Metering Point Administration Service means the Licensee or any other public electricity
(MPAS) Operator" supplier in its capacity as a provider of metering point
administration services.
</TABLE>
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<PAGE>
Condition 14. Restriction on use of certain information and independence of the
- -------------------------------------------------------------------------------
Distribution Business
- ---------------------
1. Any information relating to or deriving from the management or
operation of the Distribution Business shall, for the purposes of this
Condition, be treated as confidential information.
2. The Licensee shall not (and shall procure that its affiliates and
related undertakings shall not) disclose or authorise access to
confidential information:
(a) save to the extent provided by sub-paragraphs 3(b) to (d), to
such of its (or its affiliates' or related undertakings')
employees, agents, advisers, consultants or contractors as are
engaged in, or in respect of, the management or operation of
the Supply Business; or
(b) save to the extent permitted by paragraph 3, to any other
person.
3. The Licensee shall (and shall procure that its affiliates and related
undertakings shall) disclose or authorise access to confidential
information only:
(a) to such of its (or its affiliates' or related undertakings')
employees, agents, advisers, consultants or contractors as are
engaged in, or in respect of, the management or operation of
the Distribution Business and require access to the
information for that purpose;
(b) where the Licensee (or any affiliate or related undertaking of
the Licensee) is required or permitted to disclose such
information by virtue of:
(i) any requirement of a Competent Authority;
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<PAGE>
(ii) the conditions of any licence granted under the Act or
any document referred to in such a licence with which it
is required by virtue of the Act or that licence to
comply;
(iii) any other requirement of law; or
(iv) the rules of the Electricity Arbitration Association
or of any judicial or other arbitral process or
tribunal of competent jurisdiction;
(c) where such information was provided by or relates to any
person who has notified (or otherwise agreed with) the
Licensee that it need not be treated as confidential; or
(d) where such information, not being information provided by or
relating to any person other than the Licensee, is placed by
the Licensee in the public domain
and in each case the Licensee shall disclose or authorise access to the
confidential information only insofar as is necessary or appropriate in
all the circumstances.
4. The Licensee shall use all reasonable endeavours to ensure that any
person who is in possession of or has access to confidential
information in accordance with sub-paragraph 3(a) shall use such
information only for the purposes of the Distribution Business.
5. For the purpose of facilitating its compliance with paragraphs 1 to 4,
the Licensee shall establish and shall thereafter maintain the full
managerial and operational independence of the Distribution Business
from:
(a) each other business (whether or not a Separate Business) of the
Licensee and of its affiliates and related undertakings; and
(b) each other business of the Agent and of its affiliates and
related undertakings.
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<PAGE>
6. In order to facilitate its compliance with paragraphs 1 to 5, the
Licensee shall ensure that:
(a) the Distribution Business is provided with such premises,
systems, equipment, facilities, property, personnel, data and
management resources as are necessary for the efficient and
effective management and operation of the Business;
(b) no business of the Licensee or the Agent (or of any affiliate
or related undertaking of the Licensee or the Agent), other
than the Distribution Business, may use or have access to:
(i) premises or parts of premises occupied by persons
engaged in, or in respect of, the management or
operation of the Distribution Business;
(ii) systems for the recording, processing or storage of
data to which persons engaged in, or in respect of,
the management or operation of the Distribution
Business also have access;
(iii) equipment, facilities or property employed for the
management or operation of the Distribution Business; or
(iv) the services of persons who are (whether or not as
their principal occupation) engaged in, or in respect
of, the management or operation of the Distribution
Business; and
(c) it can and does, insofar as is legally possible, prevent any
person who has ceased to be engaged in, or in respect of, the
management or operation of the Distribution Business from being
engaged in, or in respect of, the activities of any other
business of the Licensee or the Agent (or of any affiliate or
related undertaking of the Licensee or the Agent) until the
expiry of an appropriate time from the date on which he ceased
to be engaged by the Distribution Business.
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7. The Director may, upon the written request of the Licensee, issue a
direction relieving the Licensee of its obligations under paragraphs 1
to 6 - to such extent and subject to such terms and conditions as he
may specify in that direction where:
(a) it is not reasonably practicable for the Licensee to comply
with any aspect of those obligations;
(b) in the case of paragraphs 2 to 4, a failure to comply with
any aspect of those obligations would be of a trivial nature;
or
(c) in the case of paragraph 5 and sub-paragraph 6(b), any
arrangements for the use of or access to premises, systems,
equipment, facilities, property or personnel by both the
Distribution Business and any other business of the Licensee
or the Agent (or of any affiliate or related undertaking of
the Licensee or the Agent):
(i) do not involve a cross-subsidy being either given to the
Distribution Business by such other business or received
from the Distribution Business by such other business;
(ii) obtain for the Distribution Business, in the most
efficient and economical manner possible, the use of
the relevant premises, systems, equipment,
facilities, property or personnel; and
(iii) do not restrict, distort or prevent competition in the
generation or supply of electricity.
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<PAGE>
8. Where, subsequent to the issue of a direction pursuant to paragraph 7,
the criteria set out at sub-paragraph 7(a), (b) or (c) cease to be
satisfied, the Director may withdraw the direction or modify any terms
and conditions which may be specified in it.
9. For the purposes of paragraphs 7 and 8 the Director shall, following
consultation with the Licensee, determine any question as to whether
the criteria set out at sub-paragraph 7(a), (b) or (c) are or continue
to be satisfied.
10. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"appropriate time" means 3 months, or such shorter period as the Director
may approve in respect of any person or class of persons.
"Competent Authority" means the Secretary of State, the Director, the
Compliance Officer, the Stock Exchange, the Panel on
Take-overs and Mergers, or any local or national
agency, regulatory body, authority, department,
inspectorate, minister, ministry, official or public
or statutory person (whether autonomous or not) of, or
of the government of, the Unite Kingdom or the
European Community.
"confidential information" bears the meaning given at paragraph 1.
"Electricity Arbitration Association" means the unincorporated members' club of that name
formed inter alia to promote the efficient and economic
operation of the procedure for the resolution of disputes
within the electricity supply industry by means of arbitration
or otherwise in accordance with its arbitration rules.
</TABLE>
109
<PAGE>
Condition 14A. Appointment of Compliance Officer
- -------------------------------------------------
1. The Licensee shall no later than 30 November 1999 prepare a statement
in a form approved by the Director setting out the practices,
procedures and systems which the Licensee has adopted (or intends to
adopt) to ensure its compliance with the Relevant Duties.
2. The Licensee may periodically revise the information set out in and,
with the approval of the Director, alter the form of the statement
prepared in accordance with paragraph 1 and shall, at least once every
year during which this Licence is in force, review such statement in
order that the information set out therein shall continue to be
accurate in all material respects.
3. The Licensee shall send a copy of the statement prepared in accordance
with paragraph 1, and of each revision of such statement in accordance
with paragraph 2, to the Director.
4. The Licensee shall, following consultation with the Agent and the
Director, appoint a competent person (who shall be known as the
"Compliance Officer") for the purpose of facilitating compliance by the
Licensee with the Relevant Duties.
5. The Licensee shall at all times engage the services of the Compliance
Officer for the performance of such duties and tasks as the Licensee
considers it appropriate to assign to him for the purposes specified at
paragraph 4, which duties and tasks shall include those set out at
paragraph 8.
6. The Licensee shall procure that the Compliance Officer:
(a) is provided with such staff, premises, equipment, facilities
and other resources; and
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(b) has such access to its premises, systems, information and
documentation
as, in each case, he might reasonably expect to require for the
fulfilment of the duties and tasks assigned to him.
7. The Licensee shall make available to the Compliance Officer a copy of
any complaint or representation received by it from any person in
respect of a matter arising under or by virtue of Condition 14 or in
relation to any of the practices, procedures and systems adopted by the
Licensee in accordance with the statement referred to at paragraph 1.
8. The duties and tasks assigned to the Compliance Officer shall include:
(a) providing relevant advice and information to the Licensee for
the purpose of ensuring its compliance with the Relevant
Duties;
(b) monitoring the effectiveness of the practices, procedures and
systems adopted by the Licensee in accordance with the
statement referred to at paragraph 1;
(c) advising whether, to the extent that the implementation of
such practices, procedures and systems requires the
co-operation of the Agent, they are designed so as reasonably
to admit of the required co-operation;
(d) investigating any complaint or representation made available to
him in accordance with paragraph 7;
(e) recommending and advising upon the remedial action which any
such investigation has demonstrated to be necessary or
desirable;
(f) providing relevant advice and information to the Licensee for
the purpose of ensuring its effective implementation of:
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(i) the practices, procedures and systems adopted in
accordance with the statement referred to at paragraph
1; and
(ii) any remedial action recommended in accordance with
sub-paragraph (d); and
(g) reporting annually to the directors of the Licensee - in
respect of the year ending 31 December 1999 and of each
subsequent year - as to his activities during the period
covered by the report, including the fulfilment of the other
duties and tasks assigned to him by the Licensee.
9. As soon as is reasonably practicable following each annual report of
the Compliance Officer, the Licensee shall produce a report:
(a) as to its compliance during the relevant year with the
Relevant Duties; and
(b) as to its implementation of the practices, procedures and
systems adopted in accordance with the statement referred to
at paragraph 1.
10. The report produced in accordance with paragraph 9 shall in
particular:
(a) detail the activities of the Compliance Officer during the
relevant year;
(b) refer to such other matters as are or may be appropriate in
relation to the implementation of the practices, procedures and
systems adopted in accordance with the statement referred to at
paragraph 1; and
(c) set out the details of any investigations conducted by the
Compliance Officer, including:
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(i) the number, type and source of the complaints or
representations on which such investigations were based;
(ii) the outcome of such investigations; and
(iii) any remedial action taken by the Licensee following
such investigations.
11. The Licensee shall submit to the Director a copy of the report produced
in accordance with paragraph 9, and shall give or send a copy of the
report to any person who requests such a copy.
12. In this Condition:
"Relevant Duties" means the obligations
set out at Condition 14 and
the terms and conditions of
any direction issued pursuant
to paragraph 7 of Condition
14.
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Condition 15. Requirement to facilitate competition in the Generation and Supply
- --------------------------------------------------------------------------------
of Electricity
- ---------------
1. The Licensee shall, in pursuance of its authorised activities, conduct
its Distribution Business so as to facilitate:
(a) competition in the generation of electricity; and
(b) competition in the supply of electricity within the authorised
area.
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Condition 16. Compliance with the Grid Code
- -------------------------------------------
1. The Licensee shall comply with the provisions of the Grid Code in so
far as applicable to it.
2. The Director may (following consultation with the Transmission Company)
issue directions relieving the Licensee of its obligation under
paragraph 1 in respect of such parts of the Grid Code and to such
extent as may be specified in those directions.
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Condition 17. Security arrangements
- -----------------------------------
1. The Licensee shall comply with the provisions of the Fuel Security Code
and such provisions shall have effect as if they were set out in this
Licence.
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Condition 18. Conditions affecting customers' statutory rights
- --------------------------------------------------------------
1. The Licensee shall not include in or send with any notice given under
Section 16(3) of the Act, or any form provided to customers for use in
giving notice under Section 16(2) of the Act, or any notice sent to
customers prior to their entering into a tariff or special agreement,
an invitation to agree to anything which, by virtue of the Act, may
only be done or (as the case may be) not done:
(a) with the agreement of that customer; or
(b) in any case where that customer withholds his agreement or
makes that agreement subject to terms and conditions to which
the Licensee objects, with the approval or consent or by order
of the Secretary of State
unless the form and terms of such invitation have first been submitted
to and approved by the Director.
2. Nothing in paragraph 1 shall prevent the Licensee from:
(a) including in any such notice any provision or condition which
the Licensee is required or permitted to include in such
notice by virtue of Section 16(4) of the Act; or
(b) including in any such notice concerning the provision of a
supply to premises:
(i) not previously supplied by the Licensee; or
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(ii) where any modification is required to any electric
line, electrical plant or electric meter through
which such premises are supplied, or where any change
is required to the location thereof
an invitation to any customer to agree to any provision or
condition concerning the installation or location of any or
all of an electric line, electrical plant or an electric meter
in any such case without having submitted the form and terms of such
agreement or notice to the Director.
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Condition 19. Licensee's apparatus on customers' side of meter
- --------------------------------------------------------------
1. This Condition applies where the Licensee, whether on its own behalf or
as a provider of meter operation services to another Electricity
Supplier, installs a second meter or other apparatus for the purpose of
ascertaining or regulating the amount of electricity supplied, the
period of supply, or any other quantity or time connected with the
supply on the customer's side of non half-hourly metering equipment
registering the quantity of the supply to that customer.
2. Any second meter or other apparatus installed by the Licensee in the
position and for a purpose described in paragraph 1 shall be such that
the power consumed by it, when aggregated with the power consumed by
any other meter or apparatus installed by the Licensee in the like
position and for a like purpose in relation to the customer, does not
exceed 10 watts except where otherwise agreed with the customer.
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Condition 20. Provision of distribution services for persons who are of
- ------------------------------------------------------------------------
pensionable age or disabled or chronically sick
- -----------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice detailing the special
services the Licensee will make available for Domestic Customers who
are of pensionable age or disabled or chronically sick.
2. The code of practice shall include arrangements by which the Licensee
will where appropriate, in respect of its customers, provide special
means of identifying persons acting on behalf of the Licensee.
3. The code of practice shall further include arrangements whereby the
Licensee will:
(a) take reasonable steps to draw the attention of customers to
the existence of a register of customers who may be expected,
by virtue of being of pensionable age or disabled or
chronically sick, to require:
(i) information and advice in respect of the matter set out
at paragraph 2; or
(ii) advance notice of interruptions to the supply of
electricity;
(b) maintain such a register, comprising the relevant details of
each customer who requests (or, in the case of a customer
supplied by a private electricity supplier, whose supplier
requests) his inclusion on it; and
(c) give to all customers so registered, in respect of
interruptions to the supply of electricity, such information
and advice as may be appropriate and is of such nature as
shall be set out in the code of practice.
4. This Condition is subject to the provisions of Condition 24.
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Condition 21. Code of practice on procedures with respect to site access
- -------------------------------------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice setting out the
principles and procedures the Licensee will follow in respect of any
person acting on its behalf who requires access to customers' premises.
2. The code of practice shall include procedures calculated to ensure that
persons visiting customers' premises on behalf of the Licensee:
(a) possess the skills necessary to perform the required duties;
(b) are readily identifiable to members of the public;
(c) use passwords provided for vulnerable customers;
(d) are appropriate persons to visit and enter customers' premises;
and
(e) are able to inform customers, on request, of a contact point
for help and advice they may require in relation to the supply
of electricity.
3. This Condition is subject to the provisions of Condition 24.
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<PAGE>
Condition 22. Standards of performance for the Distribution Business
- --------------------------------------------------------------------
1. The Licensee shall conduct its Distribution Business in the manner
which it reasonably considers to be best calculated to achieve any
standards of overall performance as may be determined by the Director
pursuant to Section 40 of the Act.
2. The Licensee shall not enter into a use of system agreement with any
Electricity Supplier that does not provide for the Licensee to make
payments in respect of the performance of the Distribution Business to
the Electricity Supplier for the benefit of any customer of that
Electricity Supplier equivalent to such sums as would have been paid
pursuant to the standards of performance prescribed by the Director in
accordance with regulations made under Section 39 of the Act had that
customer been a tariff customer of the Licensee in those situations
where the Licensee would have been obliged to make such a payment.
3. In making payments in accordance with any standards of performance or
in accordance with paragraph 2, the Licensee shall not discriminate:
(a) between any persons or class or classes thereof; or
(b) as between the Licensee and any persons or class or classes
thereof.
122
<PAGE>
Condition 23. Distribution Business complaint handling procedure
- ----------------------------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice detailing the
procedure for handling complaints from customers about the manner in
which the Licensee conducts its Distribution Business.
2. Any procedure established in accordance with this Condition shall
specify the periods within which it is intended that different
descriptions of complaint should be processed and resolved.
3. This Condition is subject to the provisions of Condition 24.
123
<PAGE>
Condition 24. Preparation, review of and compliance with customer service codes
- -------------------------------------------------------------------------------
1. This Condition applies to any code of practice required to be prepared
by the Licensee pursuant to Condition 20, Condition 21 and Condition 23
of this Licence.
2. In first preparing such a code the Licensee shall, prior to submitting
that code to the Director, consult the Relevant Consumers' Committee
and shall have regard to any representations made by the committee
about such code or the manner in which it is likely to be operated.
3. Where before the expiry of 30 days of the Licensee first submitting
such code to the Director for his approval the Director notifies the
Licensee that the Director considers the code is not sufficient for the
purposes of meeting the requirements of this Licence the Licensee shall
forthwith make such changes as the Director may require.
4. The Licensee shall, whenever requested to do so by the Director, review
such code and the manner in which it has been operated, with a view to
determining whether any modification should be made to it or to the
manner of its operation.
5. In carrying out any such review the Licensee shall consult the Relevant
Consumers' Committee and shall have regard to any representations made
by it about such code or the manner in which it is likely to be or (as
the case may be) has been operated.
6. The Licensee shall submit any revision of such code which, after
consulting the Relevant Consumers' Committee in accordance with
paragraph 5, it wishes to make, to the Director for his approval and
following his approval in writing shall then revise the code.
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<PAGE>
7. The Licensee shall:
(a) as soon as practicable following the preparation of any code
or any revision made to it send to the Director and the
Relevant Consumers' Committee a copy of such code or such
revision (in each case in the form approved by the Director);
(b) draw the attention of those of its customers to whom such code
applies to the existence of the code and of each substantive
revision of it and to the means by which they may inspect a
copy of such code in its latest form; and
(c) give or send free of charge a copy of such code (as from time to
time revised) to any person who requests it.
8. No changes may be made to any code otherwise than in accordance with
the foregoing procedures.
9. The Licensee shall ensure, so far as reasonably practicable, that it
complies with such arrangements or procedures (as the case may be) as
are contained in or described by any code to which this condition
applies and approved by the Director or any revision to such code
approved by the Director.
125
<PAGE>
Condition 25. Record of and report on Distribution Business performance
- -----------------------------------------------------------------------
1. The Licensee shall keep a record of its general operation of the
arrangements mentioned in Condition 20 to 23 and if the Director so
directs in writing, of its operation of any particular cases specified,
or of a description specified, by him.
2. The Licensee shall keep a statistical record of the performance of the
Distribution Business in relation to the provision of services to its
Designated Customers under the terms of contracts or in accordance with
tariffs fixed under Section 18 of the Act, including services relating
to:
(a) the holding of security deposits;
(b) the offering of appointments and the making of visits to
customers' premises;
(c) payments made to customers and to suppliers pursuant to the
standards of performance prescribed by the Director in
accordance with regulations made under Section 39 of the Act
or in accordance with paragraphs 2 and 3 of Condition 22.
3. The Licensee shall, from time to time as required by the Director,
provide to the Director and to the Relevant Consumers' Committee such
of the information contained in the records prepared in accordance with
paragraphs 1 and 2 as the Director may request in writing.
4. As soon as is reasonably practicable after the end of each calendar
year, the Licensee shall submit to the Director and the Relevant
Consumers' Committee a report dealing with the matters mentioned in
paragraphs 1 and 2 in relation to that year and shall:
126
<PAGE>
(a) publish the report so submitted in such manner as will in the
reasonable opinion of the Licensee secure adequate publicity
for it; and
(b) send a copy of it free of charge to any person requesting one,
except that, in performing its obligations under sub-paragraphs 4(a)
and (b), the Licensee shall exclude from the report such information as
appears to it to be necessary or expedient to ensure that, save where
they consent, individual Designated Customers referred to therein
cannot readily be identified.
5. The report shall be presented, so far as is reasonably practicable, in
a standard form designated by the Director for the purposes of this
Condition.
127
<PAGE>
Condition 26. Publication of supply numbers
- -------------------------------------------
1. Subject to paragraph 4, the Licensee shall by 31 December 1997 inform
each customer of a number or numbers ("the Supply Number(s)") relevant
to the registration, under the Master Registration Agreement, of a
supplier of electricity to the premises owned or occupied by such
customer.
2. The Licensee shall, at the same time as it informs a customer of the
relevant Supply Number in accordance with paragraph 1, send to that
customer a statement in writing which provides a clear and sufficient
explanation of the nature and function of the Supply Number, such
statement having received the prior approval of the Director.
3. The Supply Number shall consist of a number of data items, each of
which shall be represented by a numerical identifier which shall:
(a) have the number of digits specified in a direction issued by
the Director;
(b) be approved by the Director; and
(c) be used by the Licensee in common with all Electricity
Suppliers.
4. The Director may issue a direction relieving the Licensee of its
obligation under paragraphs 1 and 3 to such extent and subject to such
terms and conditions as he may specify in that direction.
128
<PAGE>
Condition 27. Relations with the Relevant Consumers' Committee
- --------------------------------------------------------------
1. The Licensee shall meet with the Relevant Consumers' Committee whenever
requested to do so by that committee, up to a maximum of six times in
every year during the period of this Licence.
2. Without prejudice to paragraph 1, the Licensee shall meet the Relevant
Consumers' Committee at least once in every year during the period of
this Licence.
3. In at least one meeting with the Relevant Consumers' Committee in every
year during the period of this Licence, the Licensee shall be
represented by one or more directors of the Licensee.
129
<PAGE>
Condition 28. Health and safety of employees
- ---------------------------------------------
1. The Licensee shall, together with all other licensees, consult with
appropriate representatives of persons employed by itself and by those
licensees in order to establish and maintain an appropriate machinery
or forum for the joint consideration of matters of mutual concern in
respect of the health and safety of such persons.
2. In this Condition:
"licensees" means all holders of licences granted
under Section 6(1)(a), 6(1)(b), 6(1)(c)
and 6(2) of the Act.
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<PAGE>
SECTION B. SUPPLY BUSINESS OBLIGATIONS
Sub-Section (1) General Obligations
------------------------------------
Condition 29. Supply charge restriction conditions: definitions
- ---------------------------------------------------------------
1. In this Condition, in Condition 29A to 29E and in Schedule 3B:
<TABLE>
<CAPTION>
<S> <C>
"attributed" means when used in relation to the fossil fuel levy or
payments in lieu thereof or transmission connection point
charges or remote transmission asset rentals or distribution
losses or transmission costs or allowed distribution costs, or
in relation to attributing electricity purchase or sale
contracts and electricity purchase costs to regulated
customers and other customers, attributed in accordance with
the principles set out in Part A of Schedule 3A and attribute,
attributed, attributable and attribution shall be construed
accordingly.
"average charge per unit supplied" means the supply revenue in the year divided by the quantity
supplied in that year.
"average charge per regulated unit means the regulated supply revenue in the relevant year
supplied" divided by the regulated quantity supplied in that year.
"average specified rate" means the average of the daily base rates of Barclays Bank plc
current from time to time during the period in
respect of which the calculation falls to be made.
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<PAGE>
"distribution services" means all services provided by the Licensee as part of
its Distribution Business other than excluded services.
"electricity purchase costs" means the Licensee's purchase costs of electricity
calculated in accordance with the principles in Part F
of Schedule 3 of this Licence as in force on 31 March
1998.
"excluded services" means those services provided by the Licensee which in
accordance with the principles set out in Part C of
Schedule 3A fall to be treated as excluded services.
"interconnector charges" means charges levied by the Interconnectors Business
of the Transmission Company and payable by the
Supply or Second Tier Supply Business of the
Licensee in respect of use of interconnector for the
transfer of electricity into England and Wales.
"maximum average charge per regulated means the charge calculated in accordance with the formula in
unit supplied" paragraph 4 of Condition 29A.
"metered" means, in relation to any quantity supplied, as measured by a
meter installed for such purpose or (where no such
meter is installed or it is not reasonably
practicable to measure the quantity by such meter) as
otherwise reasonably calculated.
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<PAGE>
"0.1 MW customer" means any customer other than an over 0.1 MW customer in its
capacity as such.
"0.1 MW premises" means any premises other than over 0.1 MW premises.
"over 0.1 MW customer" means a customer supplied at over 0.1 MW premises, but shall
not include such customer insofar as supplied at 0.1 MW
premises.
"over 0.1 MW premises" means premises at which the average of the maximum monthly
demands in the three months of highest maximum demand in any
period of twelve consecutive months commencing on or after
January 1993 exceeds one tenth of a megawatt.
"quantity supplied" means the aggregate quantity of units supplied by the Licensee in the
relevant year metered at the points of supply (whether or not
in the authorised area of the Licensee).
"regulated customer" means a person other than the Licensee who in the calendar year
ending in relevant year t-1 was supplied at 0.1 MW
premises.
"relevant year" means a financial year commencing on or after 1st April 1990.
133
<PAGE>
"relevant year t" means that relevant year for the purposes of which any
calculation falls to be made; "relevant year t-1"
means the relevant year preceding relevant year t
or, in respect of the period prior to 1st April
1990, the period of 12 calendar months commencing
on 1st April 1989; and similar expressions shall
be construed accordingly.
"remote transmission asset rentals" means any rent or other periodic payment payable by the
Distribution Business of the Licensee to the Transmission
Company in respect of remote transmission assets
forming part of the Licensee's Distribution
System.
"sixth relevant year" means the relevant year commencing 1st April 1995.
"supply" includes supply outside the authorised area, standby and
top-up supply and sale and any other sales of electricity by
the Licensee to persons other than customers; and "supplied"
and similar expressions shall be construed accordingly.
"supply charge restriction means Condition 29 to 29E together with Schedule 3B
conditions" to this Licence, as from time to time modified or
replaced in accordance therewith or pursuant to
Sections 11, 14 or 15 of the Act.
"supply charges" means all charges (including charges for the
provision of distribution services and standing
charges) made by the Licensee in respect of
electricity supplied by the Licensee other than
charges for the provision of excluded services by
the Licensee.
134
<PAGE>
"supply revenue" means the revenue (measured on an accruals
basis) derived by the Licensee from supply
charges after deduction of value added tax (if any)
and any other taxes based directly on the amounts so
derived.
"transmission charges" means charges levied by the Transmission
Company payable by the Supply or the Second Tier
Supply Business of the Licensee in respect of the
transmission of electricity, but for the
avoidance of doubt shall exclude transmission
connection point charges and remote transmission
asset rentals.
"transmission connection point charges" means charges levied by the Transmission Company
as connection charges by direct reference to the
number or nature of the connections between the
Licensee's Distribution System and the
transmission system and payable by the
Distribution Business of the Licensee.
"unit" means a kilowatt hour.
</TABLE>
135
<PAGE>
Condition 29A. Restriction on Supply Charges
- --------------------------------------------
Continuation Of Tariffs
- -----------------------
1.1 Save where the Director consents in writing to a tariff being
discontinued, the Licensee shall continue to make available to
customers at Designated Premises the tariffs listed under the
Licensee's name in Annex A to this Condition.
1.2 Where a customer at Designated Premises was supplied at the end of the
eighth relevant year on a tariff listed under the Licensee's name in
Annex B to this Condition, the Licensee shall continue to offer that
tariff to that customer at those premises unless the Director consents
in writing to the Licensee's not doing so.
1.3 The Licensee shall not, without the consent in writing of the Director,
change the terms (other than price, which shall be regulated in
accordance with this Condition) of any tariff described in the second
column of the Table; and the terms to which this prohibition applies
include, for example, the hours between which particular prices apply
and the level of consumption at which prices change.
New Tariffs
- -----------
2. The Licensee shall not offer to supply any customer at Designated
Premises on a tariff not shown in the Table unless the terms of that
tariff have been approved by the Director.
The Price Restraint
- -------------------
3. Without prejudice to Condition 29D, the prices in the tariffs which
apply at the beginning of the ninth relevant year to supplies to
136
<PAGE>
Designated Customers shall be set at or below the limit imposed by
paragraph 4 and in addition at or below each of the limits imposed by
paragraph 5 and (where those paragraphs apply) by paragraphs 6 and 7.
4. The prices referred to in paragraph 3 shall be so set that they do not
cause the value of
(n)(SIGMA)(1) PSi(t).QSiO + (n)(SIGMA)PUi(t) . QUi0
--------------------------------------------------
composite term 1(n)(SIGMA) PSi0.QSi0+(n)(SIGMA)i0.QUi0
to exceed the value of the formula
{100 + RPI(t)- X(a}
-------------------
100
where,
(n) (SIGMA)(1) means the summation across all tariffs; and
X(a) has the value given against the Licensee's
name in Annex C to this Condition.
5.1 Without prejudice to Condition 29D, at the beginning of the ninth
relevant year the Licensee shall so set its prices to Designated
Customers supplied on the tariff numbered 1 in the Table that the total
charge for that year for a Designated Customer supplied on such a
tariff who consumes 3300 units in that year shall not exceed
{PSi0 + 3300 PUi0 {100 + RPI(t) - X(a}
-------------------
where
X(a) has the value given against the Licensee's name
in Annex C to this Condition.
5.2 Without prejudice to Condition 29D, at the beginning of the ninth
relevant year, the prices to Designated Customers on each of the
domestic tariffs in the Table other than the tariff numbered 1 shall be
137
<PAGE>
so set that, when used to determine the value of the terms PU(it) and
PSit, they do not cause the value of the composite term
(u)(SIGMA)1 PUi(t).QUi0
----------------------
+(s)(SIGMA) PSi(t) to
---------------------
NC
to exceed the value of the formula
{u)(SIGMA) PUi0.QUi0
-------------------- +s(SIGMA)1 PSi0}(100 + RPI(t) - X(b)
NC --------------------
where X(b) has the value of 3.
137
<PAGE>
5.3 Without prejudice to Condition 29D, at the beginning of the ninth
relevant year, the prices to Designated Customers on each of the
non-domestic tariffs in the Table shall be so set that, when used to
determine the value of the terms PUit and PSit, they do not cause the
value of the composite term
(u)(SIGMA)1 PUi(t).QUi0
------------------------+s(SIGMA)1 PSi(t) , when applied
NC
to that tariff, to exceed the value of the formula
(u)(SIGMA)1 PUi0.QUi0
---------------------+ s (SIGMA)1 PSi0} (100 + RII(t)
NC --------------
100
6. Without prejudice to Condition 29D, in the case of any tariff
described as domestic in column 3 of the Table, the standing charge to
a Designated Customer at the beginning of the ninth relevant year
shall not exceed the standing charge given for that tariff in column 5
of the Table multiplied by
[100 + RPI(t).
----------
100
138
<PAGE>
7.1 Without prejudice to Condition 29D, in the case of any tariff
described in column 2 of the Table which is a domestic
prepayment tariff,
(a) the standing charge and the unit charge at the beginning of
the ninth relevant year shall each be lower than the standing
charge and unit charge respectively set against that tariff in
column 5 of the Table by the same proportion as the standing
charge and the unit charge at the beginning of the ninth
relevant year of the nearest equivalent domestic tariff (not
being a prepayment tariff) are lower than the standing charge
and unit charge respectively of that nearest equivalent
domestic charge shown against them in column 5 of the Table
(and in this sub-paragraph the standing charge shall be
exclusive of any prepayment surcharge); and
(b) there shall at no time be any increase in the amount by which
the standing charge (including any prepayment meter surcharge)
for any domestic prepayment tariff exceeds the standing charge
for the nearest comparable domestic tariff (not being a
prepayment tariff).
7.2 The Director may direct which tariff is the nearest equivalent domestic
tariff for the purpose of this paragraph.
8.1 Without prejudice to paragraph 9 and Condition 29D, no price (whether a
standing charge or a unit charge) in any tariff shall be increased
during the ninth relevant year above the price which applies at the
beginning of the ninth relevant year, unless the Director has consented
in writing.
8.2 In giving consent the Director shall have regard in particular but not
exclusively to the impact of significant movements in costs outside the
Licensee's control, and shall consider whether such movements in costs
justify an increase in all tariffs, a differential increase in tariffs
or an increase in some tariffs only.
139
<PAGE>
9. If any change is made to the rate of the Fossil Fuel Levy between 1
August 1997 and 2 April 1998, and whenever any change is made to that
rate thereafter, every price limit set pursuant to paragraphs 4, 5, 6
and 7.1(a) shall be multiplied by the following factor
100 + F(t)
--------
100 + F(d)
10.1 Where, after the end of the eighth relevant year, the Director is
satisfied that in the eighth relevant year the average charge per unit
supplied differed from the maximum average charge per unit supplied
assumed for the purpose of setting the prices in column 5 of the Table,
the Director may give a direction to the Licensee stipulating the
prices to be charged for any (or all) of the tariffs described in
column 2 of the Table.
10.2 Before giving any such direction, the Director shall consult the
Licensee.
10.3 In considering whether to give any such direction, and in considering
the content of any such direction, the Director shall have regard
(a) to the extent to which the regulated supply revenue for the
eighth relevant year assumed for the purpose of setting the
prices in column 5 of the Table differs from the actual
regulated supply revenue for that year adjusted
(i) to reflect what the regulated supply revenue would have
been if the tariffs in force on 1 August 1997 had
remained unchanged until the end of the eighth relevant
year; and
140
<PAGE>
(ii) by adding any rebates or discounts to Regulated
Customers in respect of the period from 1 August 1997 to
the end of the eighth relevant year, being rebates or
discounts not included in the tariffs in force on 1
August 1997;
(b) to any representations made by the Licensee; and
(c) to the cost to the Licensee of changing any tariff.
11.1 Where, for relevant year t, the terms TAdt or GAdt (or both of them) in
paragraph 4 of Condition 3A have a value greater than 0, the Director
may give a direction to the Licensee stipulating the prices to be
charged, in that or any subsequent relevant year, for any (or all) of
the tariffs described in Column 2 of the Table.
11.2 Before giving any such direction, the Director shall consult the
Licensee.
11.3 In considering whether to give any such direction, and in considering
the content of any such direction, the Director shall have regard
(a) to the extent by which the charges made by the Distribution
Business to the Supply Business have been reduced on account
of the terms TAdt or GAdt (or both of them) having a greater
value than 0;
(b) to any representation made by the Licensee; and
(c) to the cost to the Licensee of changing any tariff.
12.1 Without prejudice to paragraph 9 and Condition 29D, for the tenth and
every subsequent relevant year, unless the Director has consented in
writing, each component of each tariff described in column 2 of the
Table or approved for the purpose of paragraph 2 shall have a price no
greater than the price at the end of the immediately preceding relevant
year, in each case multiplied by the formula
100 + RPI(t) - X(c)
-------------------
100
where X(c) has the value of 3 for the tenth relevant year and the value
of 0 for every subsequent relevant year.
141
<PAGE>
12.2 In giving consent the Director shall have regard in particular but not
exclusively to the impact of significant movements in costs outside the
Licensee's control, and shall consider whether such movements in costs
justify an increase in all tariffs, a differential increase in tariffs
or an increase in some tariffs only.
Interpretation
- --------------
13. In this Condition:
(a) all prices and revenue shall exclude value added tax (if any);
and
(b) any reference to the first relevant year shall be a reference
to the relevant year commencing on 1 April 1990, and any
reference to the second financial year and so on shall be
construed accordingly;
(c) in respect of any tariff described in column 2 of the Table
the following terms have the following meanings:
PSit is the standing charge (or each of them) for that
tariff for the ninth relevant year t;
142
<PAGE>
PSi0 is the standing charge (or each of them) for that
tariff given in column 5 of the Table;
QSi0 is the number in column 6 of the Table set against that
standing charge;
PUi(t) is the unit charge (or each of them) for that tariff for
the ninth relevant year t;
PUi0 is the unit charge (or each of them) for that tariff
given in column 5 of the Table;
QUi0 is the number in column 6 of the Table set against that
unit charge (or each of them);
means the summation across all unit charges for
(SIGMA) that tariff;
1
s means the summation across all standing charges for that
(SIGMA) tariff;
1
NC means the number given against tariff in column 7 of
the Table; and
(d) the following terms shall have the following meanings:
F(t) means the rate of the Fossil Fuel Levy applicable
from time to time during relevant year t;
F(d) has the value of 2.2;
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<PAGE>
RPI(t) means the percentage change (whether of a positive or
a negative value) in the arithmetic average of the
Retail Price Index numbers published or determined
with respect to each of the six months July to
December (inclusive) in relevant year t-1 and the
arithmetic average of the Retail Price Index numbers
published or determined with respect to the same
months in relevant year t-2; and
the Table means the table given under the Licensee's name in
Annex D to this Condition.
<PAGE>
ANNEX A to Condition 29A
- -------------------------
Tariffs Generally Available
EASTERN ELECTRICITY Plc
Tariff No. Tariff
1 Domestic General Table 2
2 Domestic General Table 1
3 Domestic General Prepayment
4 Domestic General Prepayment - Lock Off Meter
5 Domestic Economy 7 Table 1
6 Domestic Economy 7 Table 2
7 Domestic Economy 7 Prepayment
8 Domestic Night/Day Table 1
9 Domestic Night/Day Table 2
10 Domestic Low User Tariff Table 1
11 Domestic Low User Tariff Table 2
12 Domestic Economy 10 Table 1
13 Domestic Economy 10 Table 2
14 Restricted Hours 1 - Table 1
15 Restricted Hours 1- Table 2
16 Restricted Hours 2 - Table 1
17 Restricted Hours 2 - Table 2
18 Restricted Hours 3 - Table 1
19 Restricted Hours 3 - Table 2
20,21 Business & Enterprise General Table 1
22,23 Business & Enterprise General Table 2
24 Business & Enterprise General Prepayment
25,26 Business & Enterprise Economy 7 Table 1
27,28 Business & Enterprise Economy 7 Table 2
29 Business & Enterprise Economy 7 Prepayment
30,31 Business & Enterprise Evening Weekend Economy 7 Table 1
32,33 Business & Enterprise Evening Weekend Economy 7 Table 2
34,35 Business & Enterprise Night/Day Table 1
36,37 Business & Enterprise Night/Day Table 2
38,39 Business & Enterprise Evening/Weekend Table 1
40,41 Business & Enterprise Evening/Weekend Table 2
EAST MIDLANDS ELECTRICITY Plc
Tariff No. Tariff
1 Domestic Standard
2 Domestic Economy 7
3 Cardmeter Domestic
4 Domestic Heatwise
5 Restricted Hours Tariff 1 - Domestic
6 Restricted Hours Tariff 2 - Domestic
7 Restricted Hours Tariff 3 - Domestic
143
<PAGE>
8,16 Direct Debit Discount
9 Non-Domestic Block
10 Non-Domestic Economy 7 Block
11 Non-Domestic Evening & Weekend
12 Non-Domestic Evening & Weekend Economy 7
13 Restricted Hours Tariff 1 - Non-Domestic
14 Restricted Hours Tariff 2 - Non-Domestic
15 Restricted Hours Tariff 3 - Non-Domestic
LONDON ELECTRICITY Plc
Tariff No. Tariff
1 Domestic General - Quarterly
2 Domestic General - Powerkey
3 Domestic General - Direct Debit
4 Domestic Economy 7 - Quarterly
5 Domestic Economy 7 - Powerkey
6 Domestic Economy 7 - Direct Debit
7 Domestic Economy 9 - Quarterly
8 Domestic Economy 9 - Direct Debit
9 White Meter Tariff
10 Off Peak Rate 4
11 Off Peak Rate 5
12 Off Peak Rate 6
13 Domestic Unpublished Supplies
14 Business Standard - Quarterly
15 Business Standard - Powerkey
16 Business Standard - Direct Debit
17 Business Economy 7 - Quarterly
18 Business Economy 7 - Powerkey
19 Business Economy 7 - Direct Debit
20 Business Evening/Weekend - Quarterly
21 Business Evening/Weekend - Powerkey
22 Business Evening/Weekend - Direct Debit
23 Off Peak Rate 7
24 Off Peak Rate 8
25 Off Peak Rate 9
26 Business Unmetered supplies
27,28 Business Staircase
29 Catering
MANWEB Plc
Tariff No. Tariff
1 Domestic `S'
2 Select
3,16 Prepayment
4 Economy 7
5 Off Peak
144
<PAGE>
6 White Meter
7 Option 14
8 3S
9 3T
10 3E
11 M3
12 4S
13 4T
14 4E
15 M4
17 Direct Debit
MIDLANDS ELECTRICITY Plc
Tariff No. Tariff
1 D1 - Domestic Credit Meter Tariff
2 D1 DD - Domestic Direct Debit Tariff
3 D8 - Domestic Token Meter Tariff
4 D5 - Domestic Economy 7
5 D5 DD - Domestic Economy 7 Direct Debit Tariff
6 D6 - Domestic Economy 7 Token Meter Tariff
7 OP1 - Off Peak Tariff
8 OP2 - Off Peak Tariff
9 OP3 - Off Peak Tariff
10 S - Small Supplies Tariff
11 S DD - Small Supplies Direct Debit Tariff
12 S1 - Small Supplies Economy 7 Tariff
13 S1 DD - Small Supplies Economy 7 Direct Debit Tariff
14 W - Weekend Supplies
15 W DD - Weekend Supplies Direct Debit Tariff
16 OP1 - Off Peak Non-Domestic Tariff
17 OP2 - Off Peak Non-Domestic Tariff
18 OP3 - Off Peak Non-Domestic Tariff
NORTHERN ELECTRICITY Plc
Tariff No. Tariff
1 D1 Unrestricted
2 D1T Economy 7
3 Small Domestic Users tariff
4 K1 Prepayment
5 K1T Prepayment Economy 7
6 Super Tariff
7 RH1 - Off Peak
8 RH2 - Off Peak
9 RH3 & RHB - Off Peak
10 Staff Tariff
11 Heat Plan
12 Non-Domestic Evening & Weekend
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<PAGE>
13 Evening & Weekend Small Users
14 Q1
15 Q1T Economy 7
16 Super Tariff - Business
17 RH1 - Off Peak
18 RH2 - Off Peak
19 RH3 & RHB - Off Peak
20 C7 Catering Tariff
21 Premier Payment Plan
22 Prompt Payment Discount
NORWEB Plc
Tariff No. Tariff
1 D13 Domestic Tariff
2 D11 Domestic Monthly Budget Scheme
3 D11 Domestic Prepayment
4 D56 Domestic Economy 7 Tariff
5 D22 Domestic Economy 7 Monthly Budget Scheme
6 D22 Domestic Economy 7 Prepayment
7 D92 Domestic Smart 7 Tariff
8 R16 7 Hour Off Peak Tariff
9 R11 Tariff
10 R21 Domestic Tariff
11 G13 All Purpose Quarterly Tariff
12 G11 All Purpose Monthly Budget Scheme
13 G15 Combined Premises Quarterly
14 G16 Combined Premises Monthly
15 G63 All Purpose Economy 7 Quarterly Tariff
16 G66 All Purpose Economy 7 Monthly Tariff
17 G65 Combined Premises Economy 7 Quarterly Tariff
18 G67 Combined Premises Economy 7 Monthly Tariff
19 G71 Evening & Weekend Tariff
20 G61 Economy 7 Evening/Weekend Quarterly Tariff
21 G54 Economy 7 Evening/Weekend Monthly Tariff
22 R31 Non-Domestic
23 R41 Tariff
24 R42 Tariff
25 R43 Tariff
26 R51 Floor Warming Tariff
27 Q64 Farm Crop-Drying Tariff
SEEBOARD Plc
Tariff No. Tariff
1 Domestic Standard
2 Domestic Economy 7
3 Domestic White Meter
4 Warmwise
146
<PAGE>
5 Business Standard
6 Business Economy 7
7 Business White Meter
8 Business Evening/Weekend/Night
9 Off Peak
10,11,12 Prepayment
13 Direct Debit Discount
147
<PAGE>
SOUTHERN ELECTRIC Plc
Tariff No. Tariff
1 General Domestic (Quarterly)
2 General Domestic (Keypayment)
3 General Domestic (Direct Debit)
4 Flexiheat
5 Flexiheat (Direct Debit)
6 Super Deal
7 Super Deal (Direct Debit)
8 Economy 7 (Quarterly)
9 Economy 7 (Direct Debit)
10 Economy 7 (Keypayment)
11 Domestic White Meter
12 Domestic White Meter (Direct Debit)
13,23 Restricted Hours
14,24 Restricted Hours (Direct Debit)
15 Q1 Block
16 Q1 Block (Direct Debit)
17 Q2 Day/Night
18 Q2 Day/Night (Direct Debit)
19 Q3 Evening/Weekend
20 Q3 Evening/Weekend (Direct Debit)
21 Q4 Night/Evening/Weekend
22 Q4 Night/Evening/Weekend (Direct Debit)
25 3 Phase Meter
SOUTH WALES ELECTRICITY Plc
Tariff No. Tariff
1 Domestic Basic Tariff - Credit
2 Domestic Basic Tariff - Direct Debit
3 Domestic Restricted Hours Tariff - Credit
4 Domestic Restricted Hours Tariff - Direct Debit
5 Domestic White Meter Tariff - Credit
6 Domestic White Meter Tariff - Direct Debit
7 Domestic Economy 7 Tariff - Credit
8 Domestic Economy 7 Tariff - Direct Debit
9 Domestic Winter Warmth
10 Domestic Prepayment Meter Surcharge
11 Domestic Basic Tariff - Token Meter
12 Domestic Economy 7 Tariff - Token Meter
13 Farm Domestic Basic Tariff - Credit
14 Farm Domestic Basic Tariff - Direct Debit
15 Farm Domestic White Meter Tariff - Credit
16 Farm Domestic White Meter Tariff - Direct Debit
17 Farm Domestic Economy 7 - Credit
18 Farm Domestic Economy 7 - Direct Debit
19 Farm Basic Tariff - Credit
148
<PAGE>
20 Farm Basic Tariff - Direct Debit
21 Commercial Standard Tariff - Credit
22 Commercial Standard Tariff - Direct Debit
23 Commercial S/A - Credit
24 Combined Standard Tariff - Credit
25 Combined Standard Tariff - Direct Debit
SOUTH WALES ELECTRICITY Plc
Tariff No. Tariff
26 Small Industrial Tariff - Credit
27 Small Industrial Tariff - Direct Debit
28 Farm Economy 7 - Credit
29 Farm Economy 7 - Direct Debit
30 Commercial Day/Night Tariff - Credit
31 Commercial Day/Night Tariff - Direct Debit
32 Commercial 17/7 Tariff - Credit
33 Commercial 17/7 Tariff - Direct Debit
34 Industrial Day/Night Tariff - Credit
35 Industrial Day/Night Tariff - Direct Debit
36 Industrial 17/7 Tariff - Credit
37 Industrial 17/7 Tariff - Direct Debit
38,39 Industrial Unmetered Supplies
40 Commercial Evening/Weekend Tariff - Credit
41 Commercial Evening/Weekend Tariff - Direct Debit
42 Industrial Evening/Weekend Tariff - Credit
43 Industrial Evening/Weekend Tariff - Direct Debit
44 Farm Restricted Hours Tariff - Credit
45 Farm Restricted Hours Tariff - Direct Debit
46 Commercial Restricted Hours Tariff - Credit
47 Commercial Restricted Hours Tariff - Direct Debit
48 Industrial Restricted Hours Tariff - Credit
49 Industrial Restricted Hours Tariff - Direct Debit
SOUTH WESTERN ELECTRCITY Plc
Tariff No. Tariff
1 Domestic Tariff
2 Key Meter Domestic
3 Economy 7
4 Key Meter Economy 7
5 Domestic Night/Day (LA)
6 3 Rate Heating Tariff
7 Domestic Seasonal Tariff
8 Off Peak (7 hour) Tariff (LA)
9 Off Peak (Night Only) Tariff (LA)
10 Off Peak (LA) Tariff
11 Block Tariff
12 Key Meter Block Tariff
149
<PAGE>
13 Economy 7 Block Tariff
14 Key Meter Economy 7 Block Tariff
15 Non-Domestic Seasonal
16 Economy 7 Day/Night
17 Day and Night Tariff (LA)
18 Flat Rate (LA)
19 Farm Tariff
20 Farm Economy 7 Tariff
21 Farm Day/Night Tariff (LA)
22 Off Peak (7 hour) Tariff
23 Off Peak (Night Only) Tariff
24 Off Peak (LA) Tariff
25 Direct Debit Discount
YORKSHIRE ELECTRICITY GROUP Plc
Tariff No. Tariff
1 Domestic Unrestricted
2 Economy 7
3 Domestic Off-Peak
4 Prepayment
5 Prompt Payment
6 Automated Payment
7 General Quarterly
8 Economy 7 Quarterly
9 Evening/Weekend Quarterly
10 Evening/ Weekend E7 Quarterly
11 Farm Off-Peak
12 Commercial 2 Rate Tariff
13 Commercial Off Peak
14 Industrial Off Peak Tariff
15 Prompt Payment
16 Automated Payment
150
<PAGE>
ANNEX B to Condition 29A
- ------------------------
Preserved Tariffs
EASTERN ELECTRICITY Plc
Tariff No, Tariff
4 Domestic General Prepayment - Lock Off Meter
8 Domestic Night/Day Table 1
9 Domestic Night/Day Table 2
13 Restricted Hours 1 - Table 1
14 Restricted Hours 1- Table 2
15 Restricted Hours 2 - Table 1
16 Restricted Hours 2 - Table 2
17 Restricted Hours 3 - Table 1
18 Restricted Hours 3 - Table 2
33,34 Business & Enterprise Night/Day Table 1
35,36 Business & Enterprise Night/Day Table 2
37 ,38 Business & Enterprise Evening/Weekend Table 1
39,40 Business & Enterprise Evening/Weekend Table 2
EAST MIDLANDS ELECTRICITY Plc
Tariff No. Tariff
5 Restricted Hours Tariff 1 - Domestic
6 Restricted Hours Tariff 2 - Domestic
7 Restricted Hours Tariff 3 - Domestic
13 Restricted Hours Tariff 1 - Non-Domestic
14 Restricted Hours Tariff 2 - Non-Domestic
15 Restricted Hours Tariff 3 - Non-Domestic
LONDON ELECTRICITY Plc
Tariff No. Tariff
10 Off Peak Rate 4
11 Off Peak Rate 5
12 Off Peak Rate 6
13 Domestic Unpublished Supplies
23 Off Peak Rate 7
24 Off Peak Rate 8
25 Off Peak Rate 9
26 Business Unmetered supplies
27,28 Business Staircase
29 Catering
151
<PAGE>
MANWEB Plc
Tariff No. Tariff
5 Off Peak
6 White Meter
9 3T
12 4S
13 4T
14 4E
15 M4
MIDLANDS ELECTRICITY Plc
Tariff No. Tariff
7 OP1 - Off Peak Tariff
8 OP2 - Off Peak Tariff
9 OP3 - Off Peak Tariff
16 OP1 - Off Peak Non-Domestic Tariff
17 OP2 - Off Peak Non-Domestic Tariff
18 OP3 - Off Peak Non-Domestic Tariff
NORTHERN ELECTRIC Plc
Tariff No. Tariff
10 Staff Tariff
11 Heat Plan
NORWEB Plc
Tariff No. Tariff
8 R16 7 Hour Off Peak Tariff
9 R11 Tariff
10 R21 Domestic Tariff
22 R31 Non-Domestic
23 R41 Tariff
24 R42 Tariff
25 R43 Tariff
26 R51 Floor Warming Tariff
SEEBOARD Plc
Tariff No. Tariff
3 Domestic White Meter
7 Business White Meter
9 Off Peak
SOUTHERN ELECTRIC Plc
Tariff No. Tariff
11 Domestic White Meter
12 Domestic White Meter (Direct Debit)
13,23 Restricted Hours
14,24 Restricted Hours (Direct Debit)
152
<PAGE>
SOUTH WALES ELECTRICITY Plc
Tariff No. Tariff
3 Domestic Restricted Hours Tariff - Credit
4 Domestic Restricted Hours Tariff - Direct Debit
5 Domestic White Meter Tariff - Credit
6 Domestic White Meter Tariff - Direct Debit
15 Farm Domestic White Meter Tariff - Credit
16 Farm Domestic White Meter Tariff - Direct Debit
30 Commercial Day/Night Tariff - Credit
31 Commercial Day/Night Tariff - Direct Debit
34 Industrial Day/Night Tariff - Credit
35 Industrial Day/Night Tariff - Direct Debit
44 Farm Restricted Hours Tariff - Credit
45 Farm Restricted Hours Tariff - Direct Debit
46 Commercial Restricted Hours Tariff - Credit
47 Commercial Restricted Hours Tariff - Direct Debit
48 Industrial Restricted Hours Tariff - Credit
49 Industrial Restricted Hours Tariff - Direct Debit
SOUTH WESTERN ELECTRICITY Plc
Tariff No. Tariff
5 Domestic Day/Night (LA)
8 Off Peak (7 hour) Tariff (LA)
9 Off Peak Night Only Tariff (LA)
10 Off Peak (LA) Tariff
17 Day and Night Tariff (LA)
18 Flat Rate (LA)
21 Farm Day/Night Tariff (LA)
22 Off Peak (7 hour) Tariff (LA)
23 Off Peak Night Only Tariff (LA)
24 Off Peak (LA) Tariff
YORKSHIRE ELECTRICITY GROUP Plc
Tariff No. Tariff
3 Domestic Off-Peak
11 Farm Off-Peak
12 Commercial 2 Rate Tariff
13 Commercial Off Peak
14 Industrial Off Peak Tariff
152
<PAGE>
ANNEX C to Condition 29A
- ------------------------
Value of Xa
EASTERN ELECTRICITY Plc Xa 8.9
EAST MIDLANDS ELECTRICITY Plc Xa 6.3
LONDON ELECTRICITY Plc Xa 11.8
MANWEB Plc Xa 5.8
MIDLANDS ELECTRICITY Plc Xa 7.1
NORTHERN ELECTRICITY Plc Xa 4.2
NORWEB Plc Xa 3.4
SEEBOARD Plc Xa 6.0
SOUTHERN ELECTRIC Plc Xa 3.2
SWALEC Plc Xa 8.5
SOUTH WESTERN ELECTRICITY Plc Xa 6.6
YORKSHIRE ELECTRICITY GROUP Plc Xa 3.7
153
<PAGE>
ANNEX D TO CONDITION 29A
<TABLE>
<CAPTION>
THE TABLE
EASTERN ELECTRICITY PL
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per kWh) rate in
GWh)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Domestic General Table 2 Domestic Standing Charge 2548 1146144 1146144
Primary Unit 7.15 27799.08
Additional Unit 6.70 1245.83
2 Domestic General Table 1 Domestic Standing Charge 2444 530239 530239
Primary Unit 7.02 1338.23
Additional Unit 6.57 594.54
3 Domestic General Prepayment Domestic Standing Charge 3744 118172 118172
Primary Unit 7.15 404.80
4 Domestic General Prepayment Domestic Standing Charge 3640 4543 4543
Lock-Off Meter Primary Unit 7.15 14.23
Addition Unit 6.70 6.33
5 Domestic Economy 7 Table 1 Domestic Standing Charge 3692 287625 287625
Primary Day Units 7.22 670.21
Additional Day Units 7.02 298.30
Night Units 2.51 800.30
6 Domestic Economy 7 Table 2 Domestic Standing Charge 3796 466260 466260
Primary Day Units 7.35 1133.43
Additional Day Units 7.15 504.47
Night Units 2.55 1558.10
7 Domestic Economy 7 PPM Domestic Standing Charge 4992 244936 244936
Primary Day Units 7.35 678.09
Night Units 2.55 385.90
8 Domestic Night/Day Tariff Domestic Standing Charge 3692 14259 14259
Table 1 Day Units 8.23 46.33
Primary Night Units 3.59 25.30
Additional Night Units 3.19 11.26
9 Domestic Night/Day Tariff Domestic Standing Charge 3796 33932 33932
Table 2 Day Units 8.36 108.5
Primary Night Units 3.64 76.23
Additional Night Units 3.24 33.93
10 Domestic Low User Tariff Domestic Unit Rate 9.55 0.07 83
Table 1
11 Domestic Low User Tariff Domestic Unit Rate 9.70 0.15 167
Table 2
</TABLE>
154
<PAGE>
<TABLE>
<CAPTION>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
12 Domestic Economy 10 Table 1 Domestic Standing Charge 3692 7660 7660
Primary Day Units 7.22 19.24
Additional Units 7.02 8.56
Night Units 3.23 3.70
Heating Units 3.23 90.70
13 Domestic Economy 10 Table 2 Domestic Standing Charge 3796 14825 14825
Primary Day Units 7.35 33.7
Additional Units 7.15 15.00
Night Units 3.27 10.40
Heating Units 3.27 94.81
14 Restricted Hours Tariff 1 Domestic Standing Charge 832 4173 4173
Table 1 Unit Rate 4.06 1.86
15 Restricted Hours Tariff 1 Domestic Standing Charge 884 12164 12164
Table 2 Unit Rate 4.11 82.50
16 Restricted Hours Tariff 2 Domestic Standing Charge 832 1532 1532
Table 1 Unit Rate 4.50 0.83
17 Restricted Hours Tariff 2 Domestic Standing Charge 884 3355 3355
Table 2 Unit Rate 4.55 27.64
18 Restricted Hours Tariff 3 Domestic Standing Charge 832 495 495
Table 1 Unit Rate 3.23 0.10
19 Restricted Hours Tariff 3 Domestic Standing Charge 884 1562 1562
Table 2 Unit Rate 3.27 11.79
20 Business & Enterprise General Non-Domestic Stdg Chrg - Single Phase 2444 6795 6795
Table1 Bus. Primary Units 7.32 11.49
Bus. Additional Units 7.07 5.12
Dom. Primary Units 7.02 1.06
Dom. Additional Units 6.57 0.47
21 Business & Enterprise General Non - Domestic Stdg Chrg - Three Phase 4940 3989 3989
Table1 Bus. Primary Units 7.32 17.44
Bus. Additional Units 7.07 7.76
22 Business & Enterprise General Non - Domestic Stdg Chrg - Single Phase 2548 52511 52511
Table 2 Bus. Primary Units 7.45 95.23
Bus. Additional Units 7.20 218.95
Dom. Primary Units 7.15 3.52
Dom. Additional Units 6.70 1.57
23 Business & Enterprise General Non - Domestic Stdg Chrg - Three Phase 5044 18189 18189
Table 2 Bus. Primary Units 7.45 72.21
Bus. Additional Units 7.20 32.14
</TABLE>
155
<PAGE>
<TABLE>
<CAPTION>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
24 Business & Enterprise General Non - Domestic Stdg Chrg 4888 330 330
Prepayment Bus. Primary Units 7.45 1.06
25 Business & Enterprise Economy Non - Domestic Stdg Chrg - Single Phase 3692 1336 1336
7 Table 1 Bus. Primary Units 7.47 4.54
Bus. Additional Units 7.22 2.02
Bus. Night 2.51 3.30
Dom. Primary Units 7.22 1.15
Dom. Additional Units 7.02 0.51
Domestic Night 2.51 0.54
26 Business & Enterprise Economy Non- Domestic Stdg Chrg - Three Phase 4940 2953 2953
7 Table 1 Bus. Primary Units 7.47 12.88
Bus. Additional Units 7.22 5.73
Night Units 2.51 9.97
27 Business & Enterprise Economy Non- Domestic Stdg Chrg - Single Phase 3796 6253 6253
7 Table 2 Bus. Primary Units 7.60 15.16
Bus. Additional Units 7.35 6.75
Bus. Night Units 2.55 10.52
Dom. Primary Units 7.35 2.44
Dom. Additional Units 7.15 1.09
Dom. Night Units 2.55 2.03
28 Business & Enterprise Economy Non - Domestic Stdg Chrg - Three Phase 5044 7167 7167
7 Table 2 Bus. Primary Units 7.60 33.00
Bus. Additional Units 7.35 14.69
Night Units 2.55 20.00
29 Business & Enterprise Economy Non - Domestic Stdg Chrg 6136 1066 1066
7 Prepayment Bus. Primary Units 7.60 0.98
Night Units 2.55 0.45
30 B & E Evening/Weekend Non - Domestic Stdg Chrg - Single Phase 3692 893 893
E7 Table 1 Primary Units 9.26 2.44
Additional Units 9.01 1.09
WE Units 4.55 2.44
Night Units 2.51 2.89
31 B & E Evening/Weekend E7 Non - Domestic Stdg Chrg - Three Phase 4940 1497 1497
Table 1 Primary Units 9.26 4.52
Additional Units 9.01 2.01
WE Units 4.55 3.95
Night Units 2.51 4.06
32 B & E Evening/Weekend E7 Non - Domestic Stdg Chrg - Single Phase 3796 1782 1782
Table 2 Primary Units 9.40 5.77
Additional Units 9.15 2.57
WE Units 4.60 4.99
Night Units 2.55 3.54
33 B & E Evening/Weekend E7 Non - Domestic Stdg Chrg - Three Phase 5044 3152 3152
Table 2 Primary Units 9.40 11.01
Additional Units 9.15 4.90
WE Units 4.6 8.57
Night Units 2.55 6.31
34 B & E Night/Day Tariff Table 1 Non - Domestic Stdg Chrg - Single Phase 3692 3440 3440
Day Units 8.58 0.96
Night Units 3.59 1.19
35 B & E Night/Day Tariff Table 1 Non - Domestic Stdg Chrg - Three Phase 4940 360 360
Day Units 8.58 1.98
Night Units 3.59 1.56
36 B & E Night/Day Tariff Table 2 Non - Domestic Stdg Chrg - Single Phase 3796 5765 5765
Day Units 8.72 3.20
Night Units 3.64 2.74
37 B & E Night/Day Tariff Table 2 Non - Domestic Stdg Chrg - Three Phase 5044 1466 1466
Day Units 8.72 6.41
Night Units 3.64 5.25
38 B & E Evening/Weekend Table 1 Non - Domestic Stdg Chrg - Single Phase 3692 1501 1501
Primary Day Units 9.26 4.13
Additional Units 9.01 1.84
Weekend Units 4.35 7.00
39 B & E Evening/Weekend Table 1 Non - Domestic Stdg Chrg - Three Phase 4940 3472 3472
Primary Day Units 9.26 10.73
Additional Units 9.01 4.78
Weekend Units 4.35 18.87
40 B & E Evening/Weekend Non - Domestic Stdg Chrg - Single Phase 3796 5881 5881
Table 2 Primary Day Units 9.40 9.30
Additional Units 9.15 4.13
Weekend Units 4.40 15.33
41 B & E Evening/Weekend Table 2 Non - Domestic Stdg Chrg - Three Phase 5044 5353 5353
Primary Day Units 9.40 16.74
Additional Units 9.15 7.45
Weekend Units 4.40 28.51
</TABLE>
156
<PAGE>
EAST MIDLANDS ELECTRICITY PLC
<TABLE>
<CAPTION>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Standard Domestic Standing Charge 3372 1061207 1061207
Unit Rate 6.69 3015.13
2 Economy 7 Domestic Standing Charge 5040 1054502 1054502
Day Units 6.88 3319.00
Night Units 2.45 2094.04
3 Card Meter Domestic Standing Charge 2144 279957 279957
4 Heatwise Domestic Standing Charge 1524 44022 44022
Night/Eve Units 2.67 170.43
Afternoon Units 2.67 97.11
Boost Units 6.88 1.09
5 Restricted Hour Tariff 1 Domestic Standing Charge 1368 678 678
Unit Charge 3.25 2.47
6 Restricted Hour Tariff 2 Domestic Standing Charge 1368 3364 3364
Unit Charge 3.77 16.35
7 Restricted Hour Tariff 3 Domestic Standing Charge 1368 2357 2357
Unit Charge 4.09 10.89
8 Direct Debit Discount Domestic Standing Charge Discount -500 707301 707301
9 Block Non - Domestic Standing Charge 4896 61113 61113
Primary Units 8.64 111.69
Secondary Units 6.69 100.36
10 Economy 7 Block Non - Domestic Standing Charge 6612 25149 25149
Primary Units 8.64 55.53
Secondary Units 6.84 44.84
Night Units 2.45 44.07
11 Evening and Weekend Non - Domestic Standing Charge 6612 1877 1877
Primary Units 10.07 2.70
Secondary Units 8.55 0.78
EWE Units 3.13 5.37
12 Evening and Weekend Economy 7 Non - Domestic Standing Charge 7164 4344 4344
Primary Units 10.07 6.47
Secondary Units 8.55 1.70
EWE Units 3.32 8.30
Night Units 2.45 4.97
13 Restricted Hour Tariff 1 Non - Domestic Standing Charge 1368 182 182
Unit Charge 3.25 0.49
</TABLE>
157
<PAGE>
<TABLE>
<CAPTION>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
14 Restricted Hour Tariff 2 Non - Domestic Standing Charge 1368 407 407
Unit Charge 3.77 0.98
15 Restricted Hour Tariff 3 Non - Domestic Standing Charge 1368 333 333
Unit Charge 4.09 0.72
16 Direct Debit Discount Non - Domestic Standing Charge Discount -1200 17299 17299
</TABLE>
158
<PAGE>
LONDON ELECTRICITY PLC
<TABLE>
<CAPTION>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Domestic General Purpose Rate - Domestic Standing Charge 4635.5 897732 897732
Quarterly Bill
Domestic General Purpose Rate - Domestic Unit Rate 6.83 2942.00
Quarterly Bill
2 Domestic General Purpose Rate - Domestic Standing Charge 6533.5 361274 361274
Powerkey Meter
Domestic General Purpose Rate - Domestic Unit Rate 6.60 1071.00
Powerkey Meter
3 Domestic General Purpose Rate - Domestic Standing Charge 4453 333211 333211
Direct Debit
Domestic General Purpose Rate - Domestic Unit Rate 6.55 1278.00
Direct Debit
4 Domestic Economy 7 Rate - Domestic Standing Charge 5803.5 76096 76096
Quarterly Bill
Domestic Economy 7 Rate - Domestic Day Units 7.40 238.00
Quarterly Bill
Domestic Economy 7 Rate - Domestic Night Units 2.70 303.00
Quarterly Bill
5 Domestic Economy 7 Rate - Domestic Standing Charge 7300 31495 31495
Powerkey Meter
Domestic Economy 7 Rate - Domestic Day Units 7.15 87.00
Powerkey Meter
Domestic Economy 7 Rate - Domestic Night Units 2.61 97.00
Powerkey Meter
6 Domestic Economy 7 Rate - Direct Domestic Standing Charge 5584.5 39528 39528
Debit
Domestic Economy 7 Rate - Direct Domestic Day Units 7.10 137.00
Debit
Domestic Economy 7 Rate - Direct Domestic Night Units 2.59 161.00
Debit
7 Domestic Economy 9 Rate - Domestic Standing Charge 6205 608 608
Quarterly Bill
Domestic Economy 9 Rate - Domestic Day Units 7.40 2.00
Quarterly Bill
Domestic Economy 9 Rate - Domestic Night Units 2.99 2.00
Quarterly Bill
8 Domestic Economy 9 Rate - Direct Domestic Standing Charge 5949.5 209 209
Debit
Domestic Economy 9 Rate - Direct
Debit Domestic Day Units 7.10 1.00
Domestic Economy 9 Rate - Direct
Debit Domestic Night Units 2.87 1.00
159
<PAGE>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
----------------------------------------------------------------------------------------------------------------------------
9 White Meter Rate Domestic Standing Charge 5803.5 3667 3667
White Meter Rate Domestic Day Units 7.40 12.00
White Meter Rate Domestic Night Units 3.25 12.00
10 Rate D4 Domestic Standing Charge 1168 1545 1545
Rate D4 Domestic Unit Rate 3.25 7.00
11 Rate D5 Domestic Standing Charge 1168 6016 6016
Rate D5 Domestic Unit Rate 3.91 29.00
12 Rate D6 Domestic Standing Charge 1168 2117 2117
Rate D6 Domestic Unit Rate 4.38 16.00
13 Domestic Unpublished Domestic Standing Charge 8852 2190 2190
Domestic Unpublished Domestic Unit Rate 7.68 8.00
14 Business Standard Rate - Non - Domestic Standing Charge 5000.5 45867 45867
Quarterly Bill Non - Domestic
Business Standard Rate - Non - Domestic Primary Unit Rate 8.16 136.00
Quarterly Bill
Business Standard Rate - Secondary Unit Rate 6.79 33.00
Quarterly Bill
15 Business Standard Rate - Non - Domestic Standing Charge 6862 4058 4058
Powerkey Meter Non - Domestic
Business Standard Rate - Unit Rate 7.68 14.00
Powerkey Meter
16 Business Standard Rate - Direct Non - Domestic Standing Charge 4818 12007 12007
Debit Non - Domestic
Business Standard Rate - Direct Non - Domestic Primary Unit Rate 7.83 38.00
Debit
Business Standard Rate - Direct Secondary Unit Rate 6.52 9.00
Debit
17 Business Economy 7 Rate - Non - Domestic Standing Charge 6205 2644 2644
Quarterly Bill Non - Domestic
Business Economy 7 Rate - Non - Domestic Primary Unit Rate 8.51 8.00
Quarterly Bill Non - Domestic
Business Economy 7 Rate - Secondary Unit Rate 7.35 0.00
Quarterly Bill
Business Economy 7 Rate - Night Units 2.70 6.00
Quarterly Bill
18 Business Economy 7 Rate - Non - Domestic Standing Charge 7701.5 54 54
Powerkey Meter Non - Domestic
Business Economy 7 Rate - Non - Domestic Primary Unit Rate 8.03 0.13
Powerkey Meter
Business Economy 7 Rate - Night Units 2.61 0.09
Powerkey Meter
160
<PAGE>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
---------------------------------------------------------------------------------------------------------------------------
19 Business Economy 7 Rate - Direct Non - Domestic Standing Charge 5949.5 1479 1479
Debit Non - Domestic
Business Economy 7 Rate - Direct Non - Domestic Primary Unit Rate 8.16 4.00
Debit Non - Domestic
Business Economy 7 Rate - Direct Secondary Unit Rate 7.06 0.00
Debit
Business Economy 7 Rate - Direct Night Units 2.59 2.00
Debit
20 Business Evening/Weekend Rate - Non - Domestic Standing Charge 6314.5 1346 1346
Quarterly Bill Non - Domestic
Business Evening/Weekend Rate - Non - Domestic Primary Unit Rate 10.29 2.00
Quarterly Bill Non - Domestic
Business Evening/Weekend Rate - Secondary Unit Rate 8.80 0.00
Quarterly Bill
Business Evening/Weekend Rate - Other Units 3.83 5.00
Quarterly Bill
21 Business Evening/Weekend Rate - Non - Domestic Standing Charge 7811 7 7
Powerkey Meter Non - Domestic
Business Evening/Weekend Rate - Non - Domestic Primary Unit Rate 9.71 0.01
Powerkey Meter
Business Evening/Weekend Rate - Other Units 3.71 0.02
Powerkey Meter
22 Business Evening/Weekend Rate - Non - Domestic Standing Charge 6059 1525 1525
Direct Debit Non - Domestic
Business Evening/Weekend Rate - Non - Domestic Primary Unit Rate 9.88 2.00
Direct Debit Non - Domestic
Business Evening/Weekend Rate - Secondary Unit Rate 8.45 0.00
Direct Debit
Business Evening/Weekend Rate - Other Units 3.68 5.00`
Direct Debit
23 Business Tariff D7 Non - Domestic Standing Charge 1168 477 477
Non - Domestic
Business Tariff D7 Unit Rate 3.25 2.00
24 Business Tariff D8 Non - Domestic Standing Charge 1168 91 91
Non - Domestic
Business Tariff D8 Unit Rate 3.99 0.38
25 Business Tariff D9 Non - Domestic Standing Charge 1168 164 164
Non - Domestic
Business Tariff D9 Unit Rate 4.38 1.00
161
<PAGE>
Number Description of Tariff Category Component Price PO Quantity NC
(Unit Rate in QO (Unit
pence per rate in
kWh) GWh)
------------------------------------------------------------------------------------------------------------------------------
26 Business Unmetered Supplies Non - Domestic Unit Rate 6.73 0.00
27 Business Staircase Rate Non - Domestic Standing Charge 2956.5 3454 3454
Non - Domestic
Business Staircase Rate Non - Domestic Primary Unit Rate 8.16 1.00
Business Staircase Rate Secondary Unit Rate 6.79 0.00
28 Business Staircase Rate Non - Domestic Standing Charge 2956.5 4001 4001
Non - Domestic
Business Staircase Rate Non - Domestic Primary Unit Rate 7.83 2.00
Business Staircase Rate Secondary Unit Rate 6.52 0.00
29 Business Catering Rate Non - Domestic Unit Rate 7.68 1.00
</TABLE>
162
<PAGE>
MANWEB PLC
<TABLE>
<CAPTION>
Number Description of Tariff Category Component Price PO (Unit Quantity QO NC
Rate in pence (Unit rate
per kWh) in GWh)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 Domestic Domestic Standing Charge 4621 1117013 1117013
Unit Rate 6.97 3981.00
2 Select Domestic Unit Rate 11.42 5.00
3 Prepayment Domestic Standing Charge 2121 270000 270000
4 Economy 7 Domestic Standing Charge 5920 99740 99740
Day Units 7.31 269.00
Night Units 2.71 572.00
5 Off Peak Domestic Standing Charge 1299 17345 17345
`A' Unit 3.99 11.00
`C' Unit 3.15 25.00
`D' Unit 3.76 21.00
`E' Unit 2.72 44.00
`S' Unit 4.73 3.00
6 White Meter Domestic Standing Charge 5920 2118 2118
Day Units 8.02 7.00
Night Units 3.15 8.00
7 Option 14 Domestic Standing Charge 6643 1234 1234
Peak Units 8.49 3.00
Day Units 3.25 8.00
8 3S Non - Domestic Standing Charge 6752 48424 48424
Unit Rate 6.98 217.87
9 3T Non - Domestic Standing Charge 14636 70 70
Peak Units 22.53 0.02
Other Units 6.08 0.47
10 3E Non - Domestic Standing Charge 8067 4005 4005
Day Units 7.36 14.85
Night Units 2.57 9.31
11 M3 Non - Domestic Standing Charge 8431 863 863
Weekday Units 9.00 2.07
Evenings 4.40 0.67
Weekends 4.40 1.12
Night 2.34 1.14
12 4S Non - Domestic Standing Charge 6752 79 79
Unit Rate 6.89 0.42
13 4T Non - Domestic Standing Charge 14636 1 1
Other Units 6.03 0.00
Peak Units 22.54 0.00
163
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per kWh) rate in
GWh)
-------------------------------------------------------------------------------------------------------------------------------
14 4E Non - Domestic Standing Charge 8067 2 2
Day Units 7.17 0.01
Night Units 2.53 0.01
15 M4 Non - Domestic Standing Charge 8431 12 12
Weekday 7.88 0.02
Evening 4.28 0.00
Night 4.28 0.01
Peak 2.33 0.01
21.64 0.00
16 Prepayment Domestic Discount -481.5 270000 270000
17 Direct Debit Domestic Discount -1000 330000 330000
</TABLE>
164
<PAGE>
<TABLE>
<CAPTION>
MIDLANDS ELECTRICITY PLC
Number Description of Tariff Category Component Price PO (Unit Quantity QO NC
Rate in pence (Unit rate
per kWh) in GWh)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 D1 Domestic Standing Charge 3172 967658 967658
Units 6.84 3366.48
2 D1 DD Domestic Standing Charge 3172 478000 478000
Units 6.61 1685.00
3 D8 Domestic Standing Charge 4120 253000 253000
Units 6.84 930.00
4 D5 Domestic Standing Charge 4568 200612 200612
Day Units 7.41 607.74
Night Units 2.75 789.00
5 D5 DD Domestic Standing Charge 4568 105500 105500
Day Units 7.15 369.00
Night Units 2.75 406.00
6 D6 Domestic Standing Charge 6252 61250 61250
Day Units 7.41 190.00
Night Units 2.75 212.00
7 OP1 Domestic Standing Charge 1132 9617 9617
Units 3.17 32.79
8 OP2 Domestic Standing Charge 1132 13020 13020
Units 3.52 62.23
9 OP3 Domestic Standing Charge 1132 12368 12368
Units 3.77 35.87
10 S Non - Domestic Standing Charge 3516 71937 71937
Units 7.16 255.63
11 S DD Non - Domestic Standing Charge 3516 14630 14630
Units 7.16 52.60
12 S1 Non - Domestic Standing Charge 5060 8129 8129
Units 7.70 20.86
Night Units 2.75 23.05
13 S1 DD Non - Domestic Standing Charge 5060 1215 1215
Day 7 Units 7.55 2.90
Night Units 2.75 3.76
14 W Non - Domestic Standing Charge 5060 2366 2366
Weekday Units 9.27 2.43
Other Units 4.35 5.67
165
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per kWh) rate in
GWh)
--------------------------------------------------------------------------------------------------------------------------------
15 W DD Non - Domestic Standing Charge 5060 292 292
Weekday Units 9.09 0.31
Other Units 4.35 0.73
16 OPI Non - Domestic Standing Charge 1132 1797 1797
Units 3.17 6.62
17 OP2 Non - Domestic Standing Charge 1132 899 899
Units 3.52 3.55
18 OP3 Non- Domestic Standing Charge 1132 403 403
Units 3.77 1.66
166
<PAGE>
NORTHERN ELECTRIC PLC
Number Description of Tariff Category Component Price PO (Unit Quantity QO NC
Rate in pence (Unit rate
per kWh) in GWh)
--------------------------------------------------------------------------------------------------------------------------------
1 D1 Unrestricted Domestic Standing Charge 4372 1040796 1040796
D1 Unrestricted Domestic Units 7.20 2361.33
D1 Unrestricted Domestic Units 6.46 1068.50
2 D1T E7 Domestic Standing Charge 5464 72971 72971
D1T E7 Domestic Day Units 7.5 102.07
D1T E7 Domestic Day Units 6.75 125.84
D1T E7 Domestic Night Units 2.45 344.26
3 SUD (Small Users Dom.) Domestic Units 9.90 0.40 403
4 K1 Prepayment Domestic Standing Charge 6560 110061 110061
K1 Prepayment Domestic Units 6.82 289.83
5 KIT E7 Prepayment Domestic Standing Charge 7648 7908 7908
KIT E7 Prepayment Domestic Day Units 7.32 21.63
KIT E7 Prepayment Domestic Night Units 2.45 34.68
6 Super Tariff Domestic Standing Charge 6112 23860 23860
Super Tariff Domestic Day Units 7.20 61.38
Super Tariff Domestic Night Units 3.08 13.13
Super Tariff Domestic Heat Units 2.34 172.96
7 RH1 Off-Peak Domestic Off-Peak Units 3.03 2.44
8 RH2 Off-Peak Domestic Off-Peak Units 3.73 19.54
9 RH3 & RHB Off-Peak Domestic Off-Peak Units 4.05 4.91
10 Staff Rates Domestic Units 7.00 0.14
11 Heatplan Domestic Units 2.60 0.52
12 Evening & Weekend Non -Domestic Standing Charge 5764 686 686
Non -Domestic
Non - Domestic Weekday Daytime Units 10.41 1.77
Evening & Weekend Units 4.90 0.10.
13 EWS (EW small user) Non - Domestic Standing Charge 4372 0.00 0
EWS Non - Domestic
Units 9.90 0.00
167
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per kWh) rate in
GWh)
-------------------------------------------------------------------------------------------------------------------------------
14 Q1 Non - Domestic Standing Charge 4636 52714 52714
Q1 Non - Domestic Units < 6000 8.30 89.45
Q1 Non - Domestic Units >6000 7.60 104.60
15 Q1T Non - Domestic Standing Charge 5752 2293 2293
Q1T Non - Domestic Day Units <6000 8.60 2.13
Q1T Non - Domestic Day Units >6000 7.90 7.32
Q1T Non - Domestic Night Units 2.51 2.75
16 Super Tariff Business Non - Domestic Standing Charge 1880 381 381
Super Tariff Business
Super Tariff Business Non - Domestic Normal Units 7.60 0.89
Non - Domestic Heat Units 2.34 2.62
17 RH1 Off-Peak Non - Domestic Off-Peak Units 3.03 1.76
18 RH2 Off-Peak Non - Domestic Off-Peak Units 3.73 1.76
19 RH3 & RHB Off-Peak Non - Domestic Off-Peak Units 4.05 0.27
20 C7 Catering Tariff Non - Domestic Units 6.45 5.23 1400
Discount Schemes
21 Premier Payment Plan Domestic Discount -866 358077 358077
22 Prompt Payment Domestic Standing Charge Discount -400 585766 585766
Discount
168
<PAGE>
NORWEB PLC
Number Description of Tariff Category Component Price PO (Unit Quantity QO NC
Rate in pence (Unit rate
per kWh) in GWh)
--------------------------------------------------------------------------------------------------------------------------------
1 D13 Domestic Tariff Domestic Standing Charge 3432 939533 939533
D13 Domestic Tariff Domestic Units 6.50 2797.29
2 D11 Domestic Monthly Budget Domestic Standing Charge 3332 630329 630329
Scheme
D11 Domestic Monthly Budge Scheme Domestic Units 6.28 2693.28
3 D11 Domestic Prepayment Domestic Standing Charge 5804 202371 202371
D11 Domestic Prepayment Domestic Units 6.28 705.41
4 D56 Economy 7 Tariff Domestic Standing Charge 4740 127586 127586
D56 Economy 7 Tariff Domestic Day Units 7.04 345.05
D56 Economy 7 Tariff Domestic Night Units 2.46 649.17
5 D22 Domestic Economy 7 Monthly Domestic Standing Charge 4640 82326 82326
Budget Scheme
D22 Domestic Economy 7 Monthly Domestic Day Units 6.83 320.05
Budget Scheme
D22 Domestic Economy 7 Monthly Domestic Night Units 2.46 508.39
Budge Scheme
6 D22 Domestic Economy 7 Prepayment Domestic Standing Charge 7112 21931 21931
D22 Domestic Economy 7 Prepayment
D22 Domestic Economy 7 Prepayment Domestic Day Units 6.83 71.92
Domestic Night Units 2.46 117.90
7 D92 Domestic Smart 7 Tariff Domestic Standing Charge 5268 332 332
D92 Domestic Smart 7 Tariff Domestic Day Units 8.79 0.42
D92 Domestic Smart 7 Tariff Domestic Evening/Weekend Units 4.58 0.93
Night Units
D92 Domestic Smart 7 Tariff Domestic 2.33 3.15
8 R16 7 Hour Off Peak Tariff Domestic Standing Charge 1308 14498 14498
R16 7 Hour Off Peak Tariff Domestic Unit Rate 2.46 60.48
9 R11 Tariff Domestic Standing Charge 1308 501 501
R11 Tariff Domestic Unit Rate 2.98 2.83
10 R21 Domestic Domestic Standing Charge 1308 10551 10551
R21 Domestic Domestic Unit Rate 3.31 34.45
169
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
------------ -------------------------------------------------------------------------------------------------------------------
11 G13 All Purpose Quarterly Tariff Non - Domestic Standing Charge 4436 55505 55505
G13 All Purpose Quarterly Tariff Non - Domestic
G13 All Purpose Quarterly Tariff Non - Domestic Primary Units 7.90 58.80
Secondary Units 6.08 158.90
12 G11 All Purpose Monthly Budget Non - Domestic Standing Charge 4400 9450 9450
Scheme Tariff Non - Domestic
G11 All Purpose Monthly Budget Non - Domestic Primary Units 7.89 19.70
Scheme Tariff
G11 All Purpose Monthly Budget Secondary Units 5.96 55.32
Scheme Tariff
13 G15 Combined Premises Quarterly Non - Domestic Standing Charge 4436 9963 9963
G15 Combined Premises Quarterly Non - Domestic
G15 Combined Premises Quarterly Non - Domestic Primary Units 7.90 16.85
Secondary Units 5.96 24.59
14 G16 Combined Premises Monthly Non - Domestic Standing Charge 4400 1898 1898
G16 Combined Premises Monthly Non - Domestic
G16 Combined Premises Monthly Non - Domestic Primary Units 7.89 4.19
Secondary Units 5.96 7.18
15 G63 Economy 7 All Purpose Non - Domestic Standing Charge 5744 2874 2874
Quarterly Tariff Non - Domestic
G63 Economy 7 All Purpose Non - Domestic Primary Units 8.26 3.86
Quarterly Tariff Non - Domestic
G63 Economy 7 All Purpose Secondary Units 6.51 11.42
Quarterly Tariff
G63 Economy 7 All Purpose Night Units 2.46 10.30
Quarterly Tariff
16 G66 Economy 7 All Purpose Non - Domestic Standing Charge 5708 644 644
Monthly Tariff Non - Domestic
G66 Economy 7 All Purpose Non - Domestic Primary Units 8.17 0.81
Monthly Tariff Non - Domestic
G66 Economy 7 All Purpose Secondary Units 6.38 2.56
Monthly Tariff
G66 Economy 7 All Purpose Night Units 2.46 2.20
Monthly Tariff
170
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
------------------------------------------------------------------------------------------------------------------------------
17 G65 Economy 7 Combined Premises Non - Domestic Standing Charge 5744 980 980
Quarterly
Non - Domestic
G65 Economy 7 Combined Premises Primary Units 8.26 0.57
Quarterly Non - Domestic
G65 Economy 7 Combined Premises Non - Domestic Secondary Units 6.51 0.96
Quarterly
G65 Economy 7 Combined Premises Night Units 2.46 2.12
Quarterly
18 G67 Economy 7 Combined Premises Non - Domestic Standing Charge 5708 195 195
Monthly
Non - Domestic
G67 Economy 7 Combined Premises Primary Units 8.17 0.14
Monthly Non - Domestic
G67 Economy 7 Combined Premises Non - Domestic Secondary Units 6.38 0.25
Monthly
G67 Economy 7 Combined Premises Night Units 2.46 0.48
Monthly
19 G71 Evening & Weekend Tariff Non - Domestic Standing Charge 5796 2780 2780
Non - Domestic
G71 Evening & Weekend Tariff Non - Domestic Primary Units 9.83 2.91
Non - Domestic
G71 Evening & Weekend Tariff Secondary Units 7.94 2.29
G71 Evening & Weekend Tariff Evening/Weekend Units 4.09 8.55
20 G61 Economy 7 Evening/Weekend Non - Domestic Standing Charge 6488 390 390
Quarterly
Non - Domestic
G61 Economy 7 Evening/Weekend Primary Units 9.83 0.32
Quarterly Non - Domestic
G61 Economy 7 Evening/Weekend Non - Domestic Secondary Units 7.94 0.65
Quarterly
Non - Domestic
G61 Economy 7 Evening/Weekend Evening/Weekend Units 4.09 1.31
Quarterly
G61 Economy 7 Evening/Weekend Night Units 2.46 0.67
Quarterly
171
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
----------------------------------------------------------------------------------------------------------------------------
21 G54 Economy 7 Evening/Weekend Non - Domestic Standing Charge 6424 26 26
Monthly
Non - Domestic
G54 Economy 7 Evening/Weekend Primary Units 9.76 0.02
Monthly Non - Domestic
G54 Economy 7 Evening/Weekend Non - Domestic Secondary Units 7.88 0.05
Monthly
Non - Domestic
G54 Economy 7 Evening/Weekend Evening/Weekend Units 4.07 0.10
Monthly
G54 Economy 7 Evening/Weekend Night Units 2.46 0.05
Monthly
22 R31 Non Domestic Non - Domestic Standing Charge 1308 169 169
Non - Domestic
R31 Non Domestic Unit Rate 3.42 0.70
23 R41 Tariff Non - Domestic Standing Charge 1308 3679 3679
Non - Domestic
R41 Tariff Unit Rate 3.59 13.97
24 R42 Non - Domestic Standing Charge 1308 43 43
Non - Domestic
R42 Unit Rate 4.02 0.16
25 R43 Non - Domestic Standing Charge 1308 61 61
Non - Domestic
R43 Unit Rate 4.17 0.34
26 R51 Floor Warming Tariff Non - Domestic Standing Charge 1308 5732 5732
Non - Domestic
R51 Floor Warming Tariff Unit Rate 3.59 16.91
27 Q64 Farm Crop Drying Tariff Non - Domestic Standing Charge 1308 96 96
Non - Domestic
Q64 Farm Crop Drying Tariff Unit Rate 5.34 0.33
172
<PAGE>
SEEBOARD PLC
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
--------------------------------------------------------------------------------------------------------------------------------
1 Domestic Standard Domestic Units 7.14 4526.00 1244349
Standing Charge 1300 1244349
2 Domestic Economy Domestic Day Units 7.14 1962.00 562551
Night Units 2.66 1488.00
Standing Charge 2100 562551
3 Domestic White Meter Domestic Day Units 7.73 47.00 13735
Night Units 3.35 37.00
Standing Charge 2100 13735
4 Warm Wise Domestic Day Units 8.03 16.00 11232
Night Units 2.96 10.00
Standing Charge 2920 11232
Heating Units 2.46 98.00
Evening/Weekend 6.36 18.00
5 Business Standard Commercial/ Units 7.14 215.17 77916
Ind. Standing Charge 1300 77916
6 Business Economy Commercial/ Day Units 7.14 89.00 14766
Ind. Night Units 2.66 30.00
Standing Charge 2100 14766
7 Business White Meter Commercial/ Day Units 7.73 1.29 434
Ind Night Units 3.35 0.86
Standing Charge 2100 434
8 Business Evening/Weekend/Night Commercial/ Day Units 9.40 3.51 1313
Ind Evening/Weekend 4.30 4.06
Night Units 2.66 2.14
Standing Charge 2560 1313
9 Off Peak Domestic/ Average Units 4.12 18.58 5258
Commercial Standing Charge 688 5258
10 Prepayment Meter Domestic Standing Charge - Coin 2540 60 60
11 Prepayment Meter Domestic Standing Charge - Budget 2200 215000 215000
12 Prepayment Meter Domestic Discount -800 215060 215060
13 Direct Debit Discount Domestic Standing Charge Discount -800 685000 685000
173
<PAGE>
SOUTHERN ELECTRIC PLC
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
-------------------------------------------------------------------------------------------------------------------------------
1 General Domestic (Qtrly) Domestic Standing Charge 3720 1383722 1383722
Units 6.31 4847.43
2 General Domestic (Keypayment) Domestic Units 6.23 722.30 228166
Standing Charge 3720 228166
Keyprepayment Charge 1800 228166
3 General Domestic (DD) Domestic Standing Charge 3720 456719 456719
Units 6.16 2455.82
4 Flexiheat Domestic Day Units 9.51 4.43 1294
Other Units 4.43 2.07
Heat Units 2.14 8.27
Standing Charge 4720 1294
Meter Charge 1000 1294
5 Flexiheat (DD) Domestic Day Units 9.28 1.94 431
Other Units 4.32 0.90
Heat Units 2.09 3.61
Standing Charge 4720 431
Meter Charge 1000 431
6 Super Deal Domestic Day Units 7.02 51.72 19658
Other Units 3.45 17.33
Heat Units 2.14 55.70
Standing Charge 4720 19658
Meter Charge 1000 19658
7 Super Deal (DD) Domestic Day Units 6.85 22.64 6553
Other Units 3.37 7.56
Heat Units 2.09 24.30
Standing Charge 4720 6553
Meter Charge 1000 6553
8 Economy 7 Domestic Day Units 7.02 417.44 154649
Night Units 2.38 831.70
Standing Charge 4720 154649
9 Economy 7 (DD) Domestic Day Units 6.85 258.72 72271
Night Units 2.32 474.42
Standing Charge 4720 72271
10 Economy 7 (Keypayment) Domestic Day Units 6.93 169.32 51051
Night Units 2.35 244.27
Standing Charge 4720 51051
Meter Surcharge 1800 51051
174
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
------------------------------------------------------------------------------------------------------------------------------
11 White Meter Domestic Day Units 7.18 9.71 3014
Night Units 2.77 12.42
Standing Charge 4720 3014
12 White Meter (DD) Domestic Day Units 7.01 4.24 952
Night Units 2.7 5.37
Standing Charge 4720 952
13 Restricted Hour Domestic `A' Units 3.88 16.62 51152
`B' Units 4.3 9.55
`Bx' Units 4.19 32.57
`E' Units 2.71 133.32
`F' Units 3.81 30.85
`Fx' Units 3.62 90.75
Standing Charge 1080 51152
14 Resticted Hour (DD) Domestic `A' Units 3.79 7.27 17050
`B' Units 4.2 4.18
`Bx' Units 4.09 14.23
`E' Units 2.65 58.03
`F' Units 3.72 13.47
`Fx' Units 3.53 39.51
Standing Charge 1080 17050
15 Q1 Block Non - Domestic Units 6.61 341.13 85282
Standing Charge 4520 85282
16 Q1 Block (DD) Non - Domestic Units 6.45 113.71 28644
Standing Charge 4520 28644
17 Q2 Day/Night Non - Domestic Day Units 7.17 20.5 6197
Night Units 2.38 12.04
Standing Charge 5520 6197
18 Q2 Day/Night (DD) Non - Domestic Day Units 7 6.79 2052
Night Units 2.32 3.99
Standing Charge 5520 2052
19 Q3Evening/ Non - Domestic Day Units 8.31 3.87 1602
Weekend Evening/Weekend 3.84 4.54
Standing Charge 5520 1602
20 Q3 Evening/Weekend (DD) Non - Domestic Other Units 8.11 1.29 534
Evening/Weekend 3.75 1.51
Standing Charge 5520 534
21 Q4 Night/Evening/ Non - Domestic Other Units 8.31 2.07 1124
Weekend Night Units 2.38 1.83
Evening/Weekend 4.35 2.01
Standing Charge 6240 1124
175
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
---------------------------------------------------------------------------------------------------------------------------
22 Q4 Night/Evening/ Non - Domestic Day Units 8.11 0.69 375
Weekend (DD) Night Units 2.32 0.61
Evening/Weekend 4.25 0.67
Standing Charge 6240 375
23 Restricted Hour Non - Domestic `Ac' Units 3.88 3.7 4993
`Bc' Units 4.3 2.86
`Ec' Units 2.71 8.25
`Fc' Units 3.81 2.02
Standing Charge 1080 4993
24 Restricted Hour (DD) Non - Domestic `Ac' Units 3.79 1.25 1664
`Bc' Units 4.2 0.97
`Ec' Units 2.65 2.78
`Fc' Units 3.72 0.68
Standing Charge 1080 1664
25 3 Phase Meter Surcharge 1240 5930 5930
176
<PAGE>
SOUTH WALES ELECTRICITY PLC
Number Description of Tariff Category Component Price PO (Unit Quantity QO NC
Rate in pence (Unit rate
per kWh) in GWh)
------------------------------------------------------------------------------------------------------------------------------
1 Domestic Basic Tariff - Credit Domestic Standing Charge 4400 446472 446472
Domestic Basic Tariff - Credit Domestic Unit Rate 7.82 1214.05
2 Domestic Basic Tariff - Direct Domestic Standing Charge 4288 220382 220382
Debit
Domestic Basic Tariff - Direct Domestic Unit Rate 7.62 807.92
Debit
3 Domestic Restricted Hours Tariff Domestic Unit Rate 4.33 6.87
- Credit
4 Domestic Restricted Hours Tariff Domestic Unit Rate 4.22 3.83
- Direct Debit
5 Domestic White Meter Tariff - Domestic Standing Charge 5536 371 371
Credit
Domestic White Meter Tariff - Domestic Day Units 8.71 1.27
Credit
Domestic White Meter Tariff Domestic Night Units 3.78 1.16
Credit
6 Domestic White Meter Tariff - Domestic Standing Charge 5396 229 229
Direct Debit
Domestic White Meter Tariff - Domestic Day Units 8.49 0.63
Direct Debit
Domestic White Meter Tariff - Domestic Night Units 3.69 0.84
Direct Debit
7 Domestic Economy 7 Tariff - Domestic Standing Charge 5536 40037 40037
Credit
Domestic Economy 7 Tariff - Domestic Day Units 8.26 103.78
Credit
Domestic Economy 7 Tariff - Domestic Night Units 2.91 197.46
Credit
8 Domestic Economy 7 Tariff - Domestic Standing Charge 5396 22609 22609
Direct Debit
Domestic Economy 7 Tariff - Domestic Day Units 8.05 80.76
Direct Debit
Domestic Economy 7 Tariff - Domestic Night Units 2.83 138.10
Direct Debit
9 Domestic Winter Warmth Tariff Domestic Winter Warmth 3.17 0.79
10 Domestic Prepayment Meter Domestic Token/PP Surcharge 3220 158000 158000
Surcharge
177
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
--------------------------------------------------------------------------------------------------------------------------------
11 Domestic Basic Tariff - Token Domestic Standing Charge 4332 147446 147446
Meter
Domestic Basic Tariff - Token Domestic Unit Rate 7.70 483.03
Meter
12 Domestic Economy 7 - Token Meter Domestic Standing Charge 5452 10554 10554
Domestic Economy 7 - Token Meter
Domestic Economy 7 - Token Meter Domestic Day Units 8.14 31.66
Domestic Night Units 2.87 49.34
13 Farm Domestic Basic Tariff - Domestic Standing Charge 4400 5927 5927
Credit
Farm Domestic Basic Tariff - Domestic Unit Rate 7.82 27.78
Credit
14 Farm Domestic Basic Tariff - Domestic Standing Charge 4288.00 1273 1273
Direct Debit
Farm Domestic Basic Tariff - Domestic Unit Rate 7.62 6.32
Direct Debit
15 Farm Domestic White Meter Tariff Domestic Standing Charge 5536 30 30
- Credit
Farm Domestic White Meter Tariff Domestic Day Units 8.71 0.17
- Credit
Farm Domestic White Meter Tariff Domestic Night Units 3.78 0.16
- Credit
16 Farm Domestic White Meter Tariff Domestic Standing Charge 5396 7 7
- Direct Debit
Farm Domestic White Meter Tariff Domestic Day Units 8.49 0.03
- Direct Debit
Farm Domestic White Meter Tariff Domestic Night Units 3.69 0.04
- Direct Debit
17 Farm Domestic Economy 7 Tariff - Domestic Standing Charge 5536 1407 1407
Credit
Farm Domestic Economy 7 Tariff - Domestic Day Units 8.26 8.74
Credit
Farm Domestic Economy 7 Tariff - Domestic Night Units 2.91 8.44
Credit
18 Farm Domestic Economy 7 Tariff - Domestic Standing Charge 5396 393 393
Direct Debit
Farm Domestic Economy 7 Tariff - Domestic Day Units 8.05 2.36
Direct Debit
Farm Domestic Economy 7 Tariff - Domestic Night Units 2.83 2.66
Direct Debit
178
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
------------ ---------------------------------------------------------------------------------------------------------------
19 Farm Basic Tariff - Credit Non - Domestic Standing Charge 5232 2000 2000
Non - Domestic
Farm Basic Tariff - Credit Unit Rate 7.82 8.90
20 Farm Basic Tariff - Direct Debit Non - Domestic Standing Charge 5100 200 200
Non - Domestic
Farm Basic Tariff - Direct Debit Unit Rate 7.62 0.80
21 Commercial Standard Tariff - Non - Domestic Standing Charge 5232 27500 27500
Credit Non - Domestic
Commercial Standard Tariff - Non - Domestic Primary Units 9.20 66.50
Credit
Commercial Standard Tariff - Secondary Units 7.82 33.60
Credit
22 Commercial Standard Tariff - Non - Domestic Standing Charge 5100 4400 4400
Direct Debit Non - Domestic
Commercial Standard Tariff - Non - Domestic Primary Units 8.97 8.00
Direct Debit
Commercial Standard Tariff - Secondary Units 7.62 5.00
Direct Debit
23 Commercial S/A - Credit Non - Domestic Unit Rate 7.82 0.40
24 Combined Standard Tariff - Credit Non - Domestic Standing Charge 5232 1408 1408
Combined Standard Tariff - Credit Non - Domestic
Combined Standard Tariff - Credit Non - Domestic Primary Units 9.20 4.60
Secondary Units 7.82 2.70
25 Combined Standard Tariff - Non - Domestic Standing Charge 5100 400 400
Direct Debit Non - Domestic
Combined Standard Tariff - Non - Domestic Primary Units 8.97 1.30
Direct Debit
Combined Standard Tariff - Secondary Units 7.62 0.80
Direct Debit
26 Small Industrial Tariff - Credit Non - Domestic Standing Charge 5232 2700 2700
Non - Domestic
Small Industrial Tariff - Credit Non - Domestic Primary Units 9.20 5.90
Small Industrial Tariff - Credit Secondary Units 7.82 4.60
178
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
---------------------------------------------------------------------------------------------------------------
27 Small Industrial Tariff - Direct Non - Domestic Standing Charge 5100 400 400
Debit Non - Domestic
Small Industrial Tariff - Direct Non - Domestic Primary Units 8.97 0.70
Debit
Small Industrial Tariff - Direct Secondary Units 7.62 0.60
Debit
28 Farm Economy 7 - Credit Non - Domestic Standing Charge 6368 1200 1200
Non - Domestic
Farm Economy 7 - Credit Non - Domestic Day Units 8.26 7.70
Farm Economy 7 - Credit Night Units 2.91 4.70
29 Farm Economy 7 - Direct Debit Non - Domestic Standing Charge 6208 200 200
Non - Domestic
Farm Economy 7 - Direct Debit Non - Domestic Day Units 8.05 1.20
Farm Economy 7 - Direct Debit Night Units 2.83 0.70
30 Commercial Day/Night Tariff - Non - Domestic Standing Charge 6368 112 112
Credit Non - Domestic
Commercial Day/Night Tariff - Non - Domestic Primary Units 9.75 0.40
Credit Non - Domestic
Commercial Day/Night Tariff - Secondary Units 8.09 0.10
Credit
Commercial Day/Night Tariff - Night Units 3.78 0.30
Credit
31 Commercial Day/Night Tariff - Non - Domestic Standing Charge 6208 15 15
Direct Debit Non - Domestic
Commercial Day/Night Tariff - Non - Domestic Primary Units 9.51 0.10
Direct Debit Non - Domestic
Commercial Day/Night Tariff - Secondary Units 7.89 0.00
Direct Debit
Commercial Day/Night Tariff - Night Units 3.69 0.00
Direct Debit
32 Commercial 17/7 Tariff - Credit Non - Domestic Standing Charge 6368 1800 1800
Non - Domestic
Commercial 17/7 Tariff - Credit Non - Domestic Primary Units 9.75 4.60
Non - Domestic
Commercial 17/7 Tariff - Credit Secondary Units 7.95 1.50
Commercial 17/7 Tariff - Credit Night Units 3.19 5.50
179
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
-----------------------------------------------------------------------------------------------------------------------------
33 Commercial 17/7 Tariff - Direct Non - Domestic Standing Charge 6208 337 337
Debit Non - Domestic
Commercial 17/7 Tariff - Direct Non - Domestic Primary Units 9.51 0.80
Debit Non - Domestic
Commercial 17/7 Tariff - Direct Secondary Units 7.75 0.10
Debit
Commercial 17/7 Tariff - Direct Night Units 3.11 1.00
Debit
34 Industrial Day/Night Tariff - Non - Domestic Standing Charge 6368 37 37
Credit Non - Domestic
Industrial Day/Night Tariff - Non - Domestic Primary Units 9.75 0.10
Credit Non - Domestic
Industrial Day/Night Tariff - Secondary Units 8.09 0.20
Credit
Industrial Day/Night Tariff - Night Units 3.78 0.10
Credit
35 Industrial Day/Night Tariff - Non - Domestic Standing Charge 6208 0 0.00
Direct Debit Non - Domestic
Industrial Day/Night Tariff - Non - Domestic Primary Units 9.51 0.00
Direct Debit Non - Domestic
Industrial Day/Night Tariff - Secondary Units 7.89 0.00
Direct Debit
Industrial Day/Night Tariff - Night Units 3.69 0.00
Direct Debit
36 Industrial 17/7 Tariff - Credit Non - Domestic Standing Charge 6368 201 201
Non - Domestic
Industrial 17/7 Tariff - Credit Non - Domestic Primary Units 9.75 0.50
Non - Domestic
Industrial 17/7 Tariff - Credit Secondary Units 7.95 0.10
Industrial 17/7 Tariff - Credit Night Units 3.19 1.30
37 Industrial 17/7 Tariff - Direct Non - Domestic Standing Charge 6208 35 35
Debit Non - Domestic
Industrial 17/7 Tariff - Direct Non - Domestic Primary Units 9.51 0.03
Debit Non - Domestic
Industrial 17/7 Tariff - Direct Secondary Units 7.75 0.27
Debit
Industrial 17/7 Tariff - Direct Night Units 3.11 0.10
Debit
38 Industrial Unmetered Supplies Non - Domestic Day Units 9.75 0.39
39 Industrial Unmetered Supplies Non - Domestic Night Units 3.19 0.91
180
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per kWh) rate in
GWh)
--------------------------------------------------------------------------------------------------------------------------------
40 Commercial Evening/Weekend Non - Domestic Standing Charge 6368 1500 1500
Tariff - Credit Non - Domestic
Commercial Evening/Weekend Non - Domestic Primary Units 13.32 2.50
Tariff - Credit Non - Domestic
Commercial Evening/Weekend Secondary Units 9.42 0.20
Tariff - Credit
Commercial Evening/Weekend Night Units 4.57 4.90
Tariff - Credit
41 Commercial Evening/Weekend Non - Domestic Standing Charge 6208 525 525
Tariff - Direct Debit Non - Domestic
Commercial Evening/Weekend Non - Domestic Primary Units 12.99 0.80
Tariff - Direct Debit Non - Domestic
Commercial Evening/Weekend Secondary Units 9.18 0.00
Tariff - Direct Debit
Commercial Evening/Weekend Night Units 4.45 1.60
Tariff - Direct Debit
42 Industrial Evening/Weekend Non - Domestic Standing Charge 6368 72 72
Tariff - Credit Non - Domestic
Industrial Evening/Weekend Non - Domestic Primary Units 13.32 0.08
Tariff - Credit Non - Domestic
Industrial Evening/Weekend Secondary Units 9.42 0.00
Tariff - Credit
Industrial Evening/Weekend Night Units 4.57 0.10
Tariff - Credit
43 Industrial Evening/Weekend Non- Domestic Standing Charge 6208 2 2
Tariff - Direct Debit Non- Domestic
Industrial Evening/Weekend Non- Domestic Primary Units 12.99 0.00
Tariff - Direct Debit Non- Domestic
Industrial Evening/Weekend Secondary Units 9.18 0.01
Tariff - Direct Debit
Industrial Evening/Weekend Night Units 4.45 0.01
Tariff - Direct Debit
44 Farm Restricted Hours Tariff - Non - Domestic Unit Rate 4.19 0.70
Credit
45 Farm Restricted Hours Tariff - Non - Domestic Unit Rate 4.09 0.10
Direct Debit
46 Commercial Restricted Hours Non - Domestic Unit Rate 4.23 2.00
Tariff - Credit
47 Commercial Restricted Hours Non - Domestic Unit Rate 4.12 0.10
Tariff - Direct Debit
48 Industrial Restricted Hours Non - Unit Rate 3.52 0.20
Tariff - Credit Domestic
49 Industrial Restricted Hours Non - Domestic Unit Rate 3.44 0.00
Tariff - Direct Debit
181
<PAGE>
SOUTH WESTERN ELECTRICITY PLC
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per kWh) rate in
GWh)
--------------------------------------------------------------------------------------------------------------------------------
1 Domestic Tariff Domestic Standing Charge 3420 801437 801437
Unit Rate 7.26 2917.35
2 Keymeter Domestic Tariff Domestic Standing Charge 5020 147134 147134
Unit Rate 7.11 556.96
3 Economy 7 Domestic Standing Charge 4640 194900 194900
Day Units 7.79 596.06
Night Units 2.67 1045.74
4 Key Meter Economy 7 Domestic Standing Charge 6220 46812 46812
Day Units 7.63 155.65
Night Units 2.62 189.48
5 Domestic Night/Day (LA) Domestic Standing Charge 4640 2561 2561
Day Units 7.79 11.00
Night Units 3.47 10.10
6 3 Rate Heating Tariff Domestic Standing Charge 5040 164 164
Day Units 10.13 0.22
Weekend Units 5.44 0.27
Night Units 2.67 0.60
7 Domestic Seasonal Tariff Domestic Standing Charge 5040 104 104
Summer Units 4.21 0.26
Winter Units 11.72 0.07
Night Units 2.67 0.22
8 Off Peak (7hrs) Tariff (LA) Domestic Standing Charge 1220 19583 19583
Unit Rate 2.67 104.04
9 Off Peak Night Only Tariff Domestic Standing Charge 1220 2767 2767
(LA) Unit Rate 3.47 11.72
10 Off Peak (LA) Tariff Domestic Standing Charge 1220 22832 22832
`A' Unit Rate 4.03 112.24
`B(i) Primary Units 4.28 0.14
`B(i)' Additional Units 3.47 0.01
`B(ii)' Primary Units 4.41 9.76
`B(ii)' Additional Units 4.03 0.74
11 Block Tariff Non - Domestic Standing Charge 3960 53893 53893
Primary Units 10.05 116.02
Additional Units 7.26 82.37
12 Key Meter Block Tariff Non - Domestic Standing Charge 5540 682 682
Primary Units 9.85 0.52
Additional Units 7.11 1.12
182
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
--------------------------------------------------------------------------------------------------------------------------------
13 Economy 7 Block Tariff Non - Domestic Standing Charge 5180 5658 5658
Primary Day Units 10.58 12.46
Additional Day Units 7.79 4.50
Night Units 2.67 17.88
14 Key Meter E7 Block Tariff Non - Domestic Standing Charge 6740 57 57
Primary Units 10.37 0.07
Additional Day Units 7.63 0.03
Night Units 2.62 0.01
15 Non - Domestic Seasonal Non - Domestic Standing Charge 5580 240 240
Primary Summer Units 7.00 0.10
Additional Summer Units 4.21 0.60
Primary Winter Units 14.31 0.10
Additional Winter Units 11.72 0.10
Night Units 2.67 0.20
16 Economy 7 Day & Night Non - Domestic Standing Charge 5580 234 234
Day Units 11.32 0.44
Weekend Units 5.28 0.56
Night Units 2.67 0.36
17 Day & Night Tariff (LA) Non - Domestic Standing Charge 5180 1040 1040
Day Units 11.32 0.87
Night Units 4.82 1.59
18 Flat Rate (LA) Non - Domestic Rate 1 19.6 0.60
Rate 2 7.26 6.80
Primary Rate 3 9.22 0.10
Additional Rate 3 8.39 0.27
19 Farm Tariff Non - Domestic Standing Charge 5280 6930 6930
Units Rate 7.26 15.95
20 Economy 7 Farm Tariff Non - Domestic Standing Charge 6500 1778 1778
Day Units 7.79 5.47
Night Units 2.67 5.77
21 Farm Day/Night Tariff (LA) Non - Domestic Standing Charge 6500 31 31
Day Units 7.79 0.10
Night Units 3.47 0.08
22 Off-Peak (7Hrs) Tariff Non - Domestic Standing Charge 1220 1358 1358
Units 2.67 4.84
23 Off-Peak Night Only Tariff Non - Domestic Standing Charge 1220 355 355
(LA) Units 3.47 0.56
24 Off Peak (LA) Non - Domestic Standing Charge 1220 702 702
A Units 4.03 2.58
25 Direct Debit Discount Domestic Discount -787 317743 317743
183
<PAGE>
YORKSHIRE ELECTRICITY PLC
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
--------------------------------------------------------------------------------------------------------------------------------
1 Domestic UR Domestic Standing Charge 4000 1702844 1702844
Unit Charge 6.19 5774.61
2 Economy 7 Domestic Standing Charge 5200 162799 162799
Day Units 6.56 516.67
Night Units 2.49 798.21
3 Domestic Off Peak Domestic Standing Charge 1200 34147 34147
Units 3.82 146.53
4 Prepayment Domestic Standing Charge 2360 248125 248125
5 Prompt Payment Standing Charge Discount 0 361700 361700
6 Automated Payment Domestic Standing Charge Discount -1200 533512 533512
7 General Quarterly Non - Domestic Standing Charge 5200 60745 60745
1st 1000 Units 6.96 157.60
Excess Units 6.37 89.77
8 Economy 7 Quarterly Non - Domestic Standing Charge 6400 6076 6076
Night Units 2.49 16.71
First 1000 Day Units 7.33 15.34
Excess Day Units 6.74 5.10
9 Weekend/Evening Quarterly Non - Domestic Standing Charge 6400 1224 1224
WE Units 3.60 3.20
First 1000 Units 9.31 1.94
Excess Units 8.72 0.16
10 Weekend/Evening E7 Quarterly Non - Domestic Standing Charge 7200 939 939
Night Units 2.49 1.40
WE7 Units 3.60 2.17
First 1000 Units 9.31 1.93
Excess Units 8.72 0.10
11 Farm Off Peak Non - Domestic Standing Charge 1200 509 509
Units 4.32 4.57
12 Commercial `2 Rate Tar' Non - Domestic Units 3.48 0.78
13 Commercial Off Peak Non - Domestic Standing Charge 1200 1428 1428
Units 3.64 7.01
14 Industrial Off Peak Non - Domestic Standing Charge 1200 89 89
Units 4.05 0.50
184
<PAGE>
Number Description of Tariff Category Component Price PO (Unit Quantity NC
Rate in pence QO (Unit
per rate in
kWh) GWh)
--------------------------------------------------------------------------------------------------------------------------------
15 Prompt Payment Standing Charge Discount 0.00 32132 32132
16 Automated Payment Automated Standing Charge Discount -1296.2 15430 15430
Payment
</TABLE>
185
<PAGE>
Condition 29B. Restriction of supply charges: adjustments
- ---------------------------------------------------------
1. If, in respect of the eighth relevant year, the average charge per
regulated unit supplied exceeds the maximum average charge per
regulated unit supplied, but by not more than 1 1/2 per cent, the
Licensee shall ensure that the excess above the maximum average charge
per regulated unit supplied, with interest thereon at a rate 2 per cent
above the average specified rate, shall be paid to all 0.1 MW customers
who continue to be supplied by the Licensee in the ninth relevant year.
2. If, in respect of the eighth relevant year, the average charge per
regulated unit supplied exceeds the maximum average charge per
regulated unit supplied by more than 1 1/2 per cent, the Licensee shall
use all reasonable endeavours to return the excess above the maximum
average charge per unit supplied, with interest thereon at a rate 4 per
cent above the average specified rate, during the ninth relevant year
to all 0.1 MW customers supplied by the Licensee in the eighth relevant
year.
3. For the purpose of Condition 29A, no sum payable under paragraphs 1 or
2 shall be regarded as paid or payable under a tariff applicable to the
ninth relevant year or any subsequent relevant year.
4. No later than three months after the end of the eighth relevant year,
the Licensee shall send to the Director a statement accompanied by such
forecasts, estimates and calculations as may be necessary, showing the
basis by which the Licensee intends to comply with paragraphs 1 to 3.
5. The powers exercisable under paragraphs F6 and F8 of Part F of Schedule
3 in the form of licence in force on 31 March 1998 shall continue to be
exercisable after that date, but only in respect of a relevant year
ending before 1 April 1998.
186
<PAGE>
Condition 29C. Information to be provided to the Director in connection with the
- -------------------------------------------------------------------------------
supply charge restriction conditions
- ------------------------------------
1. Where, at any time during the eighth relevant year, the Licensee
intends to change the principles of attribution or any provisional
attribution specified in a statement already made to the Director or to
purchase or sell an electricity sale contract, the change or the
provisional attribution in relation to the purchase or sale shall be
specified in a written statement signed by a person authorised to sign
the statement by the directors of the Licensee which statement shall
not provide for a retrospective change of principles or for any
re-attribution of payments already made or any payment where the event
giving rise to that payment has already occurred.
2. The Director may issue directions providing that any forecast or
estimate provided in accordance with paragraph 1 shall be accompanied
by such information as regards the assumptions underlying the forecast
or estimate as may be necessary to enable the Director to be satisfied
that the forecast or estimate has been properly prepared on a
consistent basis.
3. Not later than three months after the end of a relevant year the
Licensee shall send the Director a statement, in respect of that
relevant year, showing the specified items referred to in paragraph 5.
4. The statement referred to in the preceding paragraph shall be:
(a) accompanied by a report from the Auditors that in their
opinion (i) such statement fairly presents each of the
specified items referred to in paragraph 5 in accordance with
the requirements of the supply charge restriction conditions
and (ii) the amounts shown in respect of each of those
specified items are in accordance with the Licensee's
accounting records which have been maintained in respect of
each of the relevant Separate Businesses in accordance with
Condition 71; and
187
<PAGE>
(b) certified by a director of the Licensee on behalf of the
Licensee that to the best of his knowledge, information and
belief having made all reasonable enquiries:
(i) (in respect of the eight relevant year only) there is
no amount included in its calculations under
Condition 29A and Schedule 3 (in each case in the
form of licence in force on 31 March 1998) which
represents other than:
(aa) bona fide consideration for electricity
supplied to regulated customers (as defined
in the form of licence in force on 31
March 1998); or
(bb) an amount permitted under the supply charge
restriction conditions to be so included;
(ii) there is no amount included in its calculations of
allowed security costs under Condition 29D which
represents other than an amount permitted under the
supply charge restriction conditions to be so
included;
(iii) no service has been treated as an excluded service
which was not properly so treated and no amount
included in the revenues in respect thereof
represents other than bona fide consideration for the
provision of the excluded service to which it
relates;
(iv) all amounts which should properly be taken into
account for the purposes of the supply charge
restriction conditions have been taken into account;
and
188
<PAGE>
(v) (in respect of the eighth relevant year only) there
is no amount included in its calculations under
Condition 29A and Schedule 3B in respect of
electricity purchase or sale costs which does not
result from an attribution or method of attribution
contained in the statement under either paragraph
2(a) or paragraph 2(b) in the form of licence in
force on 31 March 1998.
5. The specified items to be contained in the statement referred to in
paragraph 3 shall be the following:
(a) the information referred to at paragraph 8 of Condition 29D;
(b) the statements and information referred to in paragraph A4
and B2 of Schedule 3B; and
(c) in respect of the eighth relevant year only, the statements
and information referred to in paragraph F7 of Schedule 3 of
the Licence in the form in force on 31 March 1997
provided that the statement to be provided in the ninth relevant year
in respect of the immediately preceding relevant year shall contain the
information required by paragraph 10 of Condition 3E of the Licence in
the form in force on 31 March 1998.
6. Where the Director issues directions in accordance with paragraph 9 of
Condition 29D or paragraphs A5 and B3 of Schedule 3B then such
directions shall not have effect from a date earlier than the
commencement of the relevant year to which the statement last furnished
to the Director pursuant to paragraph 3 prior to the issue of the
directions related, unless such statement (or the accompanying report
or certificate under paragraph 4) or any statement, report or
certificate in respect of an earlier relevant year was incorrect or was
misleading in any material respect.
189
<PAGE>
7. Where the Director issues such directions as are referred to in the
preceding paragraph the Director may require the Licensee to provide a
revised statement in respect of such of the specified items as may be
affected by the directions, and the Licensee shall comply with such
request.
190
<PAGE>
Condition 29D. Supply Business allowance in respect of security costs
- ---------------------------------------------------------------------
1. At any time during a security period, the Licensee may give notice in
writing to the Director suspending, with effect from the date of
receipt of the notice by the Director, application of such of the
supply charge restriction conditions as may be specified in the notice
for the unexpired term of the security period.
2. At any time during a security period, the Director may (having regard
to his duties under the Act) by means of directions:
(a) suspend or modify for the unexpired term of the security
period the supply charge restriction conditions or any part or
parts thereof; or
(b) introduce for the unexpired term of the security period new
supply charge restriction conditions
(c) in either case, so as to make such provision as in the
opinion or estimation of the Director is requisite or
appropriate:
(i) to enable the Licensee to recover by means of
increased charges an amount estimated as being equal
to the Licensee's allowed security costs during such
period; and
(ii) to ensure that such part of the amount referred to in
sub-paragraph (i) above as is estimated as being
equal to the allowed security costs incurred by the
Licensee as costs in its Supply Business and its
Second-Tier Supply Business respectively are
recovered by appropriate equitable increases in the
charges made by the Licensee in those Businesses
191
<PAGE>
and the Licensee shall comply with the terms of any directions so
issued.
3. At any time following a security period, the Director may (following
such consultation with the Licensee and others as the Director may
consider appropriate) issue directions suspending or modifying the
supply charge restriction conditions or any part or parts thereof or
replacing such directions as may have been made during the security
period and introducing such new supply charge restriction conditions as
in the opinion of the Director are appropriate in all the circumstances
(including at the Director's discretion an appropriate adjustment
having regard to any profit gained or foregone by the Licensee during
the security period), and the Licensee shall comply with any directions
so issued.
4. At any time within three months after the issue of directions by the
Director under paragraph 3, the Licensee may serve on the Director a
disapplication request in respect of such of the supply charge
restriction conditions or any part or parts thereof as are specified in
the request.
5. If within three months of the receipt by the Director of the
disapplication request referred to in paragraph 4, the Director has
either not agreed in writing to such disapplication request or has not
made a reference to the Competition Commission under Section 12 of the
Act relating to the modification of the supply charge restriction
conditions, the Licensee may deliver one month's written notice to the
Director terminating the application of the supply charge restriction
conditions (or any part or parts thereof) as were specified in the
disapplication request.
6. Subject to paragraphs 7 and 9, the Licensee shall in any relevant year
be entitled to recover an aggregate amount equal to its allowed
security costs in that year or (insofar as not previously recovered)
any previous year, by means of appropriate equitable increases on the
charges made by the Licensee in each of its Supply and Second-Tier
Supply Businesses.
7. Paragraph 6 shall not apply in so far as such allowed security costs:
192
<PAGE>
(a) were otherwise recovered by the Licensee; or
(b) were taken into account by the Director in setting supply
charge restriction conditions by means of directions issued
under paragraph 3 above.
8. The Licensee shall following the end of each relevant year provide to
the Director, as being one of the specified items to be contained in
the statement referred to at paragraph 4 of Condition 29C, details in
respect of that relevant year of:
(a) the amount of the Licensee's allowed security costs; and
(b) the aggregate amounts charged under paragraph 6 on account of
the Licensee's allowed security costs; and
(c) the bases and calculations underlying the increases in charges
made by the Licensee in its Supply and Second-Tier Supply
Businesses under paragraph 6.
9. Where the Director is satisfied that the Licensee has recovered amounts
in excess of the allowed security costs, the Director may issue
directions requiring the Licensee to take such steps as may be
specified to reimburse customers of the Supply and Second-Tier Supply
Business for the excess amounts charged to them, and the Licensee shall
comply with any directions so issued provided that if the excess
amounts relate to allowed security costs paid to any authorised
electricity operator, the Licensee shall not be obliged to make any
such reimbursement unless and until it has recovered such costs from
the relevant authorised electricity operator.
10. No amounts charged by the Licensee under this Condition (whether or not
subsequently required to be reimbursed) shall be taken into account for
the purpose of applying the supply charge restriction provisions of
Condition 29A.
193
<PAGE>
<TABLE>
<CAPTION>
11. In this Condition:
<S> <C>
"allowed security cost" shall have the meaning ascribed to that term in the
Fuel Security Code.
"security period" means a period commencing on the date on which any
direction issued by the Secretary of State under
Section 34(4)(b) of the Act enters effect and
terminating on the date (being not earlier than the
date such direction, as varied, is revoked or
expires) as the Director, after consultation with
such persons (including without limitation, licence
holders liable to be principally affected) as he
shall consider appropriate, may with the consent of
the Secretary of State by notice to all licence
holders determine after having regard to the views of
such persons.
</TABLE>
194
<PAGE>
Condition 29E. Duration of supply charge restriction conditions
- ----------------------------------------------------------------
1. The supply charge restriction conditions shall apply so long as this
licence continues in force but shall cease to have effect (in whole or
in part, as the case may be) if the Licensee delivers to the Director a
disapplication request made in accordance with paragraph 2 and:
(a) the Director agrees in writing to the disapplication request;
or
(b) their application (in whole or in part) is terminated by
notice given by the Licensee in accordance with either
paragraph 4 or paragraph 5.
2. A disapplication request pursuant to this Condition shall (a) be in
writing addressed to the Director, (b) specify the supply charge
restriction conditions (or any part or parts thereof) to which the
request relates and (c) state the date from which the Licensee wishes
the Director to agree that the specified charge restriction conditions
shall cease to have effect.
3. Save where the Director otherwise agrees, no disapplication following
delivery of a disapplication request pursuant to this Condition shall
have effect earlier than that date which is the later of:
(a) a date being not less than 18 months after delivery of the
disapplication request; and
(b) 31st March 2000.
4. If the Director has not made a reference to the Competition Commission
under Section 12 of the Act relating to the modification of the supply
charge restriction conditions before the beginning of the period of 12
months which will end with the disapplication date, the Licensee may
deliver written notice to the Director terminating the application of
such charge restriction conditions (or any part or parts thereof) as
are specified in the disapplication request with effect from the
disapplication date or a later date.
195
<PAGE>
5. If the Competition Commission makes a report on a reference made by the
Director relating to the modification of the supply charge restriction
conditions (or any part or parts thereof) specified in the
disapplication request and such report does not include a conclusion
that the cessation of such charge restriction conditions, in whole or
in part, operates or may be expected to operate against the public
interest, the Licensee may within 30 days after the publication of the
report by the Director in accordance with Section 13 of the Act deliver
to him written notice terminating the application of such charge
restriction conditions with effect from the disapplication date or
later.
6. A disapplication request or notice served under this Condition may be
served in respect of a specified geographic area.
196
<PAGE>
Condition 30. Prohibition of cross-subsidies and of discrimination in
- ---------------------------------------------------------------------
electricity sale contracts
- --------------------------
1. The Licensee shall procure that the Supply Business does not give any
cross-subsidy to, or receive any cross-subsidy from, any other business
of the Licensee or an affiliate or related undertaking of the Licensee
(whether or not a Separate Business).
2. The Licensee shall not, and shall procure that any affiliate or related
undertaking of the Licensee shall not, sell or offer to sell
electricity under any electricity sale contract to any one relevant
purchaser or person seeking to become a relevant purchaser on terms as
to price which are materially more or less favourable than those on
which it sells or offers to sell electricity under any electricity sale
contract to comparable relevant purchasers. For these purposes, due
regard shall be had to the circumstances of sale to such purchasers
including (without limitation) volumes, load factors, conditions of
interruptibility and the dates and duration of the relevant agreements.
3. For the purposes of paragraph 2:
<TABLE>
<CAPTION>
<S> <C>
"relevant purchaser" means any purchaser of electricity from the Licensee
or any affiliate or related undertaking of the
Licensee under an electricity purchase contract.
</TABLE>
197
<PAGE>
Condition 31. Prohibition of discrimination in supply
- -----------------------------------------------------
1. This Condition applies where the Licensee is in a dominant position in
a market for the supply of electricity to customers at premises.
2. Where this Condition applies the Licensee shall not supply or offer to
supply electricity to customers in any market in which it is dominant
on terms which are predatory.
3. Where this Condition applies, but subject to paragraph 4, the Licensee
(taken together with its affiliates and related undertakings) shall
not, in supplying or offering terms for the supply of electricity to
customers in any market in which it is dominant:
(a) show undue preference to any person (or class of persons
within such market;
(b) exercise undue discrimination between any persons (or classes
of person) within such market; or
(c) set terms which are unduly onerous.
4. Nothing in paragraph 3 shall prohibit the Licensee, within any area or
class of customers (the "relevant area or class") in respect of which
there is established competition in the supply of electricity, from
supplying or offering to supply electricity on terms which are
reasonably necessary to meet that competition, save that the Licensee
(taken together with its affiliates and related undertakings) shall
not, in supplying or offering terms for the supply of electricity:
(a) show undue preference to any person (or class of persons) or
exercise undue discrimination between any persons (or classes
of person) within the relevant area or class of customers; or
198
<PAGE>
(b) set terms in respect of any person (or class of persons) in a
market in which the Licensee is dominant, save such persons
who are within the relevant area or class of customers, which
are unduly onerous.
5. For the purposes of this Condition, terms are unduly onerous if the
revenue from the supply of electricity to customers on those terms:
(a) significantly exceeds the costs of that supply; and
(b) exceeds such costs to a significantly greater degree than the
revenue from supply to all other customers of the Licensee
(and of its affiliates and related undertakings) within the
same market exceeds the costs of supply to those customers.
6. For the purposes of this Condition, a market may be defined by
reference to a geographical area, or to a class of customer or both,
save that no market defined by reference to Designated Customers shall
comprise fewer than 50,000 such customers.
7. In determining, for the purposes of this Condition, whether any persons
constitute a class of person, due regard shall be had to the
circumstances of supply to such persons including (without limitation)
volumes, load factors, conditions of interruptibility, location of
premises being supplied and date and duration of the supply contract.
8. For the purposes of this Condition, the Director shall determine any
question as to:
(a) whether any area or class of customers constitutes a market
for the supply of electricity;
(b) whether the Licensee is dominant in any market for the supply
of electricity;
199
<PAGE>
(c) whether there is established competition in respect of the
supply of electricity in any area or to any class of
customers; and
(d) whether any terms are predatory, having due regard to whether
such terms:
(i) incorporate charges which do not reasonably cover the
avoidable costs incurred in consequence of supplying
the customers in question; and
(ii) are intended or are likely to restrict, distort or
prevent competition in the supply of electricity.
9. The Director may determine that the Licensee is dominant in a specified
market:
(a) at any time prior to this Condition coming into force; or
(b) having first consulted with the Licensee and such other
persons as he considers appropriate (and having taken into
account any representations made to him), at any time after
this Condition has come into force,
and where the Director does make such a determination he shall
immediately notify the Licensee.
10. Where the Director has notified the Licensee of his determination in
accordance with paragraph 9 that it is dominant in a specified market,
the provisions of paragraphs 11 to 16 shall apply in respect of that
market.
11. Where this paragraph applies the Licensee shall, prior to supplying or
offering to supply electricity under a tariff or Designated Supply
Contract on any new terms, give to the Director at least 28 days'
notice in writing of its intention to supply on such terms.
200
<PAGE>
12. For the purposes of this Condition, a tariff or Designated Supply
Contract is on "new terms" if:
(a) it is a form of tariff or Designated Supply Contract under
which the Licensee has not previously supplied or offered to
supply electricity;
(b) it is a tariff or Designated Supply Contract in respect of
which the Licensee is varying the terms as to price; or
(c) it is a tariff or Designated Supply Contract in respect of
which the Licensee is varying any other terms in such a manner
as to significantly affect the evaluation of that tariff or
contract.
13. Where the Licensee has given notice to the Director of its intention to
supply on new terms it shall not supply or offer to supply electricity
on such terms until either the period of notice given to the Director
has expired and:
(a) the Director has not given or sent to the Licensee a
counter-notice (the "counter-notice") in accordance with
paragraph 14; or
(b) prior to the expiry of such period, the Director has informed
the Licensee that he will not issue a counter-notice in
respect of such terms.
14. The Director may issue a counter-notice where, having considered the
new terms and having had regard to the likely effects of issuing such
counter-notice (including, but not limited to, the likely effect upon
the business of the Licensee), he determines that further consideration
is required to assess whether such terms are in breach of the
provisions of this Condition.
201
<PAGE>
15. Where the Director issues a counter notice in respect of any new terms
the Licensee shall not supply or offer to supply electricity on such
terms until either:
(a) a period of 3 months from the date of the counter-notice has
expired; or
(b) prior to the expiry of such period, the Director indicates to
the Licensee that he has no present intention of taking
enforcement action under Section 25 of the Act in respect of
such terms.
16. Where the Director issues a counter-notice he may:
(a) give or send a copy of that counter-notice to any Interested
Person;
(b) invite representations from Interested Persons as to the
matters to which the counter-notice relates; and
(c) require the Licensee, within a reasonable period determined by
the Director, to provide him with such further information
relating to the new terms as he may specify (save that he may
not by virtue of this paragraph require the Licensee to
furnish him with information for the purpose of exercising his
functions under Section 48 of the Act),
and the Director shall take into account any representations made to
him by the Licensee in respect of such terms.
17. The Director may, at any time after notifying the Licensee of his
determination in accordance with paragraph 9 that it is dominant in a
specified market, determine that the Licensee is no longer dominant in
that market, and where he does make such a determination:
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(a) the Director shall immediately notify the Licensee; and
(b) the provisions of paragraphs 11 to 16 shall cease to apply in
respect of the specified market.
18. For the purposes of this Condition, any reference to the Licensee being
dominant in a market for the supply of electricity shall be treated as
a reference to the Licensee, taken together with its affiliates and
related undertakings, being so dominant.
19. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"Interested Persons" means all Electricity Suppliers which supply
electricity within the market or area or to the
class of customers in question, the Relevant
Consumers' Committee and such other persons
or bodies as in the opinion of the Director have a
legitimate interest in the terms on which the
Licensee supplies electricity.
"terms" means all the terms on which a supply of
electricity is offered or provided which
significantly affect the evaluation of that supply,
and shall include all terms as to price.
</TABLE>
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Condition 31A. Duration of discrimination conditions
- ----------------------------------------------------
1. Condition 31 shall cease to have effect (in whole or in part, as the
case may be) if the Licensee makes a disapplication request in
accordance with this Condition and:
(a) the Director agrees in writing to that request; or
(b) the application of Condition 31 (in whole or in part) is
terminated by notice given by the Licensee in accordance with
paragraph 4 or 5 of this Condition.
2. A disapplication request pursuant to this Condition may be made by the
Licensee only where the Director has notified it, in accordance with
paragraph 9 of Condition 31, of his determination that the Licensee is
dominant in a specified market, and any such request shall:
(a) be made in writing to the Director;
(b) specify whether the request relates to the whole of Condition
31 or any part or parts thereof; and
(c) state the date (the "disapplication date") from which the
Licensee wishes the specified provisions of Condition 31 to
cease to have effect, which date shall be in accordance with
paragraph 3 and not earlier than 12 months after the date on
which the request is made.
3. Where the Licensee was notified by the Director prior to this Condition
coming into force of his determination that the Licensee is dominant in
a specified market, no disapplication request made by the Licensee
shall be effective to disapply any of the provisions of Condition 31
prior to 31 March 2000.
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4. If the Director has not by the date which is 6 months prior to the
disapplication date made a reference to the Competition Commission
(under Section 12 of the Act) relating to the modification of Condition
31, the Licensee may give to the Director a notice in writing
terminating the application of such of the provisions of Condition 31
as are specified in the disapplication request with effect from the
disapplication date or from any later date specified in the notice.
5. If the Competition Commission reports on a reference made by the
Director relating to the modification of Condition 31 and does not
conclude that the disapplication of any of the provisions of that
Condition (being provisions specified in the disapplication request)
would or may be expected to operate against the public interest, the
Licensee may within 30 days of the publication of the report under
Section 13 of the Act give to the Director notice in writing
terminating the application of such provisions with effect from the
disapplication date or any later date specified in the notice.
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Condition 32. Obligation on economic purchasing
- -----------------------------------------------
1. Subject to paragraph 6, the provisions of paragraph 2 shall apply
separately in relation to purchases of electricity from
the following sources:
(a) qualifying renewable generation;
(b) qualifying non-fossil generation; and
(c) generation from any source other than as referred to in
sub-paragraphs (a) and (b) above.
2. In respect of each category referred to in paragraph 1 above, and
subject to paragraph 4 below, the Licensee shall:
(a) itself purchase;
(b) procure any affiliate of the Licensee to purchase; and
(c) in so far as it is able through the exercise of voting rights
or otherwise to do so, procure any related undertaking of the
Licensee or any defined undertaking to purchase
electricity at the best effective price reasonably obtainable having
regard to the sources available.
3. In determining the effective price at which electricity is purchased by
the Licensee or any affiliate or related undertaking of the Licensee or
any defined undertaking, regard shall be had to any payments made or
received or to be made or received for the grant of or pursuant to any
electricity purchase contract.
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4. In the discharge of its obligations under paragraph 2 above, the
Licensee may additionally have regard to any considerations liable to
affect its ability and that of any affiliate of the Licensee to
discharge its obligations under this Condition in the future, including
the future security, reliability and diversity of sources of
electricity available for purchase.
5. In this Condition (and subject to paragraph 6) references to qualifying
renewable generation and to qualifying non-fossil generation shall
refer to generation from capacity of that description which:
(a) has been contracted by the Licensee or any defined undertaking
under an arrangement certified by the Secretary of State under
Section 32(7) of the Act which was entered into prior to the
date this Licence enters force; or
(b) is available to be contracted under arrangements to be
produced to the Director in satisfaction of an obligation
imposed on the Licensee by Order made under Section 32 of the
Act after this Licence enters force.
6. Notwithstanding that generation may previously have been contracted as
being qualifying renewable generation or qualifying non-fossil
generation (as the case may be), it shall cease to be so treated to the
extent that:
(a) the Licensee (or any affiliate or related undertaking of the
Licensee or any defined undertaking) enjoys contractual
freedom to vary or discontinue its obligation to purchase such
generation; and
(b) capacity from which qualifying renewable or non-fossil
generation (as the case may be) is otherwise contracted by the
Licensee or any affiliate or related undertaking of the
Licensee or any defined undertaking is equal to or exceeds the
aggregate capacity specified in any Orders previously made
under Section 32 of the Act and continuing in force, as being
required to be available to the Licensee at that time or in
respect of any future period covered by such Orders.
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7. Paragraphs 2, 3 and 4 of this Condition shall apply mutatis mutandis
where the Licensee exercises a discretion or (by agreement or
otherwise) varies the terms of an existing contract (whether or not
entered into prior to the date of entry into force of this Licence) in
such a manner as to alter the effective price under such contract.
8. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"defined undertaking" means Non-Fossil Purchasing Agency Limited
or other entity through which the Licensee
enters into qualifying arrangements within the
meaning of Section 33 of the Act.
"purchase" includes the acquisition of electricity from
sources falling to be treated as own-generation
for the purpose of Condition 75, and the
purchase of electricity under electricity
purchase contracts.
"qualifying non-fossil shall include generation from renewable sources
generation" which for the time being has not been
contracted as being qualifying renewable
generation.
</TABLE>
208
<PAGE>
Condition 33. Tariffs
- ---------------------
1. The Licensee shall ensure that any tariffs fixed under Section 18 of
the Act shall be so framed as separately to identify:
(a) the use of system element in the Licensee's charges; and
(b) the charges in respect of the supply of electricity to tariff
customers.
2. Where the Director considers that by reason of the complexity of any
such tariffs fixed by the Licensee, simplified explanatory statements
are required or expedient for the understanding of tariff customers,
the Director may direct the Licensee to draw up such explanatory
statements and thereafter to publish them with the tariffs to which
they relate.
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Condition 34. Arrangements for informing customers on revocation of Licence
- ---------------------------------------------------------------------------
1. The Licensee shall comply with a direction from the Director in the
following terms where the Director:
(a) is, or is aware that the Secretary of State is, about to
revoke a Licence granted to another Electricity Supplier to
supply electricity (in this Condition known as the "First
Supplier"); and
(b considers that the Licensee is able to supply electricity to
the customers of the First Supplier without significantly
prejudicing the supplies of electricity which the Licensee
makes or is contracted to make.
2. The Director shall only issue a direction in accordance with paragraph
1 when the Secretary of State or, as the case may be, the Director has
served the First Supplier with a notice that he is revoking the First
Supplier's Licence to supply electricity in accordance with the terms
of the First Supplier's Licence, or such earlier date as the Director
may agree with the First Supplier.
3. A direction issued in accordance with paragraph 1 shall require that
the Licensee shall, within the period specified by the Director, send a
written notice in a form approved by the Director to each of the
persons or premises specified or described in the direction:
(a) informing the customer in question that, notwithstanding any
contract he may have with the First Supplier, the First
Supplier is no longer supplying him with electricity and has
not done so since the revocation took effect or, where the
notice has been sent before the revocation has taken effect,
will be no longer supplying him with electricity when it takes
effect;
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(b) informing the customer that the customer must from the moment
the revocation takes effect enter into a new contract for
supply with another Electricity Supplier of the customer's
choice, and that he is free to request a supply from the
Licensee; and
(c) setting out the terms upon which the Licensee is prepared to
supply electricity if requested.
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Condition 35. Basis of charges for top-up and standby supplies or sales of
electricity, exempt supply services and prepayment meter services: requirements
for transparency
- -------------------------------------------------------------------------------
1. The Licensee shall as soon as practicable prepare statements in a form
approved by the Director setting out the basis upon which charges will
be made for the provision of:
(a) top-up and standby supplies or sales of electricity; and
(b) exempt supply services
in each case in such form and with such detail as shall be necessary to
enable any person to make a reasonable estimate of the charges to which
he would become liable for the provision of such services, and (without
prejudice to the foregoing) including the information set out in
paragraphs 3 and 4 respectively.
2. The Licensee shall as soon as practicable prepare a statement in a form
approved by the Director setting out the basis upon which charges will
be made for the provision of prepayment meter services, which statement
shall be in such form and with such detail as shall be necessary to
enable any person to make a reasonable estimate of the charges to which
he would become liable for the provision of such service and of the
other terms, likely to have a material impact on the conduct of his
business, upon which the service would be provided and (without
prejudice to the foregoing) including the information set out in
paragraph 5.
3. The statement referred to at sub-paragraph 1(a) shall set out the
methods by which and the principles on which the charges for the
provision of each of top-up supplies or sales and standby supplies or
sales will be made.
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4. The statement referred to at sub-paragraph 1(b) shall set out the
methods by which and the principles on which charges for the provision
of such services will be made.
5. The statement referred to at paragraph 2 shall include a schedule of
charges for prepayment meter services, together with an explanation of
the methods by which and the principles on which such charges will be
calculated.
6. The basis on which charges for the provision of top-up and standby
supplies or sales of electricity shall be set shall reflect the costs
directly incurred in the provision thereof, together with a reasonable
rate of return on the capital represented by such costs.
7. The basis on which charges for the provision of exempt supply services
shall be set shall reflect the costs directly incurred in the provision
thereof, together with a reasonable rate of return on the capital
represented by such costs.
8. The Director may, upon the written request of the Licensee, issue a
direction relieving the Licensee of its obligations under paragraph 2
to such extent and subject to such terms and conditions as he may
specify in that direction.
9. The Licensee shall not in setting its charges for or in setting the
other terms that will apply to the provision of prepayment meter
services restrict, distort or prevent competition in the generation,
distribution or supply of electricity or in the provision of meter
operation, data retrieval, data processing or data aggregation
services.
10. The Licensee may periodically review the information set out in and,
with the approval of the Director, alter the form of the statements
prepared in accordance with paragraphs 1 and 2 and shall, at least once
in every year this Licence is in force, make any necessary revisions to
such statements in order that the information set out in the statements
shall continue to be accurate in all material respects.
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<PAGE>
11. The Licensee shall send a copy of the statements prepared in accordance
with paragraphs 1 and 2, and of each revision of such statements in
accordance with paragraph 10, to the Director.
12. The Licensee shall give or send a copy of the statements prepared in
accordance with paragraphs 1 and 2, or (as the case may be) of the
latest revision of such statements in accordance with paragraph 10, to
any person who requests a copy of such statement or statements.
13. The Licensee may make a charge for any statement given or sent pursuant
to paragraph 12 of an amount which shall not exceed the amount
specified in directions issued by the Director for the purposes of this
Condition based on the Director's estimate of the Licensee's reasonable
costs of providing such a statement.
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Condition 35A. Non-discrimination in the provision of top-up or standby supplies
- --------------------------------------------------------------------------------
or sales of electricity, exempt supply services and prepayment meter services
- -----------------------------------------------------------------------------
1. In the provision of top-up or standby supplies or sales of electricity
the Licensee shall not discriminate between any persons or class or
classes of person.
2. In the provision of exempt supply services the Licensee shall not
discriminate between any Exempt Suppliers or class or classes thereof.
3. In the provision of prepayment meter services the Licensee shall not
discriminate:
(a) between any persons or class or classes of person; or
(b) as between the Licensee (in the provision of such services by
the Licensee to itself for the purpose of its Supply or Second
Tier Supply Business) and any persons or class or classes of
person.
4. Without prejudice to paragraphs 1, 2 and 3, and subject to the
provisions of Condition 35, the Licensee shall not:
(a) make charges for the provision of top-up or standby supplies
or sales of electricity to any person or class or classes of
person which differ from the charges for such provision to any
other person or class or classes of person;
(b) make charges for the provision of exempt supply services to
any Exempt Supplier or class or classes thereof which differ
from the charges for such provision to any other Exempt
Supplier or class or classes thereof; or
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<PAGE>
(c) make charges for the provision of prepayment meter services to
any person or class or classes of person which differ from the
charges for such provision:
(i) to any other person or class or classes of person; or
(ii) to the Licensee (in the provision of such services by
the Licensee to itself for the purpose of its Supply
or Second Tier Supply Business)
except in so far as such differences reasonably reflect differences in
the costs associated with such provision.
5. The Licensee shall not in setting its charges for provision of top-up
or standby supplies or sales of electricity, or for exempt supply
services, restrict, distort or prevent competition in the generation,
distribution or supply of electricity.
216
<PAGE>
Condition 35B. Requirement to offer terms for top-up and standby, exempt supply
- -------------------------------------------------------------------------------
services and prepayment meter services
- --------------------------------------
1. On application made by any person the Licensee shall (subject to
sub-paragraphs 7(a) and (b)) offer to enter into an agreement to
provide top-up or standby supplies or sales of electricity.
2. On application made by any Exempt Supplier the Licensee shall (subject
to paragraph 7) offer to enter into an agreement for exempt supply
services within its authorised area and such offer shall make detailed
provision regarding:
(a) the making, maintenance and termination by the Licensee of
registrations under and in accordance with the Master
Registration Agreement in relation to premises to which the
Exempt Supplier supplies or is required to supply electricity;
(b) the exchange between the Licensee and Exempt Supplier of such
information as is required for the performance of the
Licensee's obligations in accordance with sub-paragraph (a);
(c) the appointment by the Exempt Supplier of an appropriate
provider of meter operation, data retrieval, data processing
and data aggregation services in relation to premises to which
it supplies electricity;
(d) the apportionment and settlement by the Licensee of charges
incurred by it by virtue of registrations under the Master
Registration Agreement which are made, maintained and
terminated in accordance with sub-paragraph (a);
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<PAGE>
(e) the reimbursement by the Exempt Supplier (by way of indemnity)
of all charges incurred by the Licensee by virtue of
registrations made and maintained in accordance with
sub-paragraph (a);
(f) the provision by the Exempt Supplier to the Licensee of
reasonable security or collateral for the performance of its
obligations under the agreement; and
(g) the varying of the agreement, including the making of
amendments necessary to give effect to any determination made
by the Director in respect of the agreement.
3. On application made by any private electricity supplier the Licensee
shall (subject to sub-paragraph 7(a)) offer to enter into an agreement
for the provision within its authorised area of access to a system
which supports the supply of electricity to Designated Customers with
prepayment meters ("prepayment meter services"), such system providing
as may be reasonably appropriate for prepayment meters which require
tokens, cards or keys for their operation and comprising facilities
for:
(a) (where requested) the purchase by private electricity
suppliers and/or encoding with data of tokens, cards or keys;
(b) the use by customers of local outlets for the purchase of
tokens and the crediting with value of cards or keys;
(c) the making of payments to suppliers in respect of sums
received by the Licensee on behalf of customers; and
(d) where relevant, the transfer of customer data to private
electricity suppliers.
4. In making an offer to enter into any agreement specified in paragraph
1 to 3, the Licensee shall set out:
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<PAGE>
(a) the date by which the services required shall be provided
(time being of the essence unless otherwise agreed between
parties);
(b) the charges to be paid in respect of the services required,
such charges (unless manifestly inappropriate):
(i) to be presented in such a way as to be referable to
the statements prepared in accordance with paragraph
1 of Condition 35 or any revision thereof; and
(ii) to be set in conformity with the requirements of
Condition 35; and
(c) such other detailed terms in respect of each of the services
required as are or may be appropriate for the purpose of the
agreement.
5. The Licensee shall offer terms for agreements in accordance with
paragraphs 1 to 3 as soon as practicable and (save where the Director
consents to a longer period) in any event not more than the period
specified in paragraph 6 after receipt by the Licensee (or its agent)
from any person of an application containing all such information as
the Licensee may reasonably require for the purpose of formulating the
terms of the offer.
6. For the purpose of paragraph 5, the period specified shall be:
(a) in the case of persons seeking exempt supply services,
prepayment meter services or top-up or standby supplies or
sales of electricity only, 28 days; or
(b) in the case of persons seeking top-up or standby supplies or
sales of electricity in conjunction with connection, 3 months.
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<PAGE>
7. The Licensee shall not be obliged pursuant to this Condition to offer
to enter or to enter into any agreement:
(a) under paragraphs 1 to 3, if to do so would be likely to
involve the Licensee being:
(i) in breach of its duties under section 9 of the Act;
(ii) in breach of the Electricity Supply Regulations 1988
or of any regulations made under section 29 of the
Act or of any other enactment relating to safety or
standards applicable in respect to the Distribution
Business;
(iii) in breach of the Grid Code or the Distribution Code;
or
(iv) in breach of the Conditions;
(b) under paragraph 1 or 2, if the person making the application
does not undertake to be bound, in so far as applicable, by
the terms of the Distribution Code or the Grid Code from time
to time in force;
(c) under paragraph 2, if the person making application ceases to
be an Exempt Supplier.
8. The Licensee shall undertake the provision of prepayment meter services
in the most efficient and economic manner practicable having regard to
the alternatives available and the other requirements of this Licence
and of the Act in so far as they relate to the provision of those
services.
220
<PAGE>
Condition 35C. Arrangements in respect of Standard Terms of Connection
- ------------------------------------------------------------------------
1. The Licensee shall not enter into a contract with a customer for the
supply of electricity to premises which are to be supplied through an
established connection without at the same time (in respect of such
premises and for the benefit of the Distribution Business) entering
into an agreement with the customer on the Standard Terms of
Connection.
221
<PAGE>
Condition 35D. Functions of the Director
- ----------------------------------------
1. If, after a period which appears to the Director to be reasonable for
the purpose, the Licensee has failed to enter into an agreement with
any person entitled or claiming to be entitled thereto pursuant to a
request under Condition 35B, the Director may, on the application of
such person or the Licensee, settle any terms of the agreement in
dispute between the Licensee and that person in such manner as appears
to the Director to be reasonable having (in so far as relevant) regard
in particular to the following considerations:
(a) that such person should pay to the Licensee:
(i) in the case of the provision of top-up or standby
supplies or sales of electricity, such sum as is
determined in accordance with paragraph 6 of
Condition 35;
(ii) in the case of exempt supply services, such sum as is
determined in accordance with paragraph 7 of
Condition 35; and
(iii) in the case of prepayment meter services, the whole
or the appropriate proportion of such sum as is
determined in accordance with paragraph 9 of
Condition 35;
(b) that the performance by the Licensee of its obligations under
the agreement should not cause it to be in breach of those
provisions referred to at sub-paragraph 7(a) of Condition 35B;
(c) that the terms and conditions of the agreement so settled by
the Director and of any other agreements entered into by the
Licensee pursuant to a request under Condition 35B should be,
so far as circumstances allow, in as similar a form as is
practicable; and
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<PAGE>
(d) in the case of exempt supply services, that the agreement for
the provision of exempt supply services should make provision
for all the matters set out at paragraph 2 of Condition 35B.
2. In so far as any person entitled or claiming to be entitled to an offer
under Condition 35B wishes to proceed on the basis of the agreement as
settled by the Director, the Licensee shall forthwith enter into and
implement such agreement in accordance with its terms.
3. If either party to such agreement proposes to vary the contractual
terms of any agreement for exempt supply services or for prepayment
meter services entered into pursuant to Condition 35B or this Condition
in any manner provided for under such agreement, the Director may, at
the request of that party, settle any dispute relating to such
variation in such manner as appears to the Director to be reasonable.
4. The Director may (following consultation with the Licensee) issue
directions relieving the Licensee of its obligations under Condition
35B relating to prepayment meter services in respect of such parts of
that Condition and to such extent as may be specified in the
directions.
223
<PAGE>
Condition 36. Provision of information to customers about security and safety
- -----------------------------------------------------------------------------
of supplies
- -----------
1. The Licensee shall make arrangements to keep each of its customers
informed of the postal address and telephone number of an enquiry
service established and operated for use by any person for the purposes
of receiving reports and offering information, guidance or advice about
any matter or incident that:
(a) causes danger or requires urgent attention, or is likely to
cause danger or require urgent attention, in relation to the
supply or distribution of electricity; or
(b) affects or is likely to affect the maintenance of the
security, availability and quality of service of the
Licensee's Distribution System.
2. The enquiry service referred to at paragraph 1 must be such a service
as shall:
(a) be provided without charge to the user at the point of use;
(b) be available to receive and process telephone reports and
enquiries at all time on every day of each year; and
(c) be operational no later than 31 March 1998.
3. The Licensee may discharge the duty imposed by paragraph 1 by providing
the requisite information to each of its customers:
(a) on the occasion of the customer first commencing to take a
supply from the Licensee; and
(b) either:
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<PAGE>
(i) where bills or statements in respect of charges for
the supply of electricity are rendered to the
customer, on a quarterly basis (it being sufficient
that the information is included on or with any bill
or statement); or
(ii) where no bills or statements in respect of charges
for the supply of electricity are rendered to the
customer, on an annual basis
and by publishing such information in such manner as will in the
opinion of the Licensee secure adequate publicity for it.
4. The Licensee shall, in so far as is practicable, take steps to inform
each of its customers of any change to the address or telephone number
of the service referred to at paragraph 1 prior to such change becoming
effective.
225
<PAGE>
Condition 37. Procedures for the detection and prevention of theft, damage and
- ------------------------------------------------------------------------------
meter interference
- -------------------
1. The Licensee shall (and shall ensure that its agents) take all
reasonable steps to detect and prevent:
(a) the theft of electricity at premises which are supplied by it;
(b) damage to any electrical plant, electric line or electricity
meter through which such premises are supplied; and
(c) interference with any electricity meter through which such
premises are supplied.
2. Where a person other than the Licensee is the owner of any electrical
plant, electric lines or meter through which the Licensee supplies
electricity to premises, the Licensee shall, as soon as is reasonably
practicable, inform that person of any incident where it has reason to
believe:
(a) there has been damage to such electrical plant, electric line
or meter; or
(b) there has been interference with the meter to alter its
register or prevent it from duly registering the quantity of
electricity supplied.
226
<PAGE>
Condition 38. Agreements for the provision of meters
- -----------------------------------------------------
1. The Licensee shall not, in the course of its Supply Business, enter
into an agreement with any person for the provision of an electricity
meter at any premises (whatever the nature of that agreement) which is
intended or is likely to restrict, distort or prevent competition in
the supply of electricity.
227
<PAGE>
Condition 39. Generation Security Standard
- ------------------------------------------
1. The Licensee shall make arrangements sufficient to meet the generation
security standard.
2. The duty imposed by paragraph 1 shall be discharged either by the
Licensee complying with the provisions of paragraph 3 below or by the
making by the Licensee of such other arrangements as may have been
previously approved in writing for the purpose by the Director.
3. The Licensee may discharge the duty imposed by paragraph 1 by, for so
long as the relevant condition is met, purchasing as a pool member
under the terms of the Pooling and Settlement Agreement quantities of
electricity which are at all times sufficient to meet the demands of
all qualifying customers of the Licensee.
4. The relevant condition referred to in paragraph 3 is that there should
at any relevant time be electricity available to be purchased under the
terms of the Pooling and Settlement Agreement at a price less than the
ceiling price.
5. The Licensee shall upon request by the Director provide to the Director
such information as the Director may require for the purpose of
monitoring compliance with this Condition and to enable the Director
(having regard to his statutory duties) to review the operation of the
generation security standard.
6. The provisions of this Condition are without prejudice to the duties of
the Licensee under the Electricity Supply Regulations 1988.
228
<PAGE>
7. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"ceiling price" means such price as would be equal to the Pool
Selling Price in circumstances where the
corresponding Pool Purchase Price was an
amount equal to the Value of Lost Load.
"generation security standard" means such standard of generation security as
will ensure that:
(a) the supply of electricity to qualifying
customers will not be discontinued in
more than 9 years in any 100 years; and
(b) the voltage or frequency of electricity
supplied to qualifying customers will
not be reduced below usual operational
limits in more than 30 years in any 100
years
by reason of insufficiency of electricity
generation available for the purposes of supply
by the Licensee to its qualifying customers at
times of annual system peak demand.
"Pool Purchase Price" and shall each have the meaning from time to time
"Pool Selling ascribed Price" to them in Schedule 9 to the Pooling
and Settlement Agreement.
"qualifying customer" means any purchaser from the Licensee entitled
and requiring at any time to be supplied by the
Licensee at premises within the authorised area
of the Licensee but shall exclude:
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<PAGE>
(a) a contract purchaser under an
interruptible contract or a contract
containing load management terms to
the extent that supplies to that purchaser
may be interrupted or reduced in
accordance with the terms of that
contract; and
(b) a tariff customer on special tariffs which
restrict supplies to particular time
periods to the extent that supplies to that
customer may be interrupted or reduced
in accordance with such tariff.
"Value of Lost Load" means in respect of the first financial year, the sum
of(pound)2 per kWh and, in respect of each succeeding
financial year, the sum which corresponds to(pound)2 per kWh
as adjusted to reflect the percentage change in the
Retail Price Index between the index published or
determined in respect to the December prior to the
start of that financial year and the index published or
determined for December 1989.
</TABLE>
230
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Condition 40. The Master Registration Agreement
- -----------------------------------------------
1. The Licensee shall be a party to and shall comply with the provisions
of the Master Registration Agreement.
231
<PAGE>
Condition 41. Restriction on use of certain information
- -------------------------------------------------------
1. Any information relating to or deriving from the management or
operation of the Distribution Business shall, for the purposes of this
Condition, be treated as confidential information.
2. The Licensee shall (and shall procure that its affiliates and related
undertakings shall) ensure that any of its (or its affiliates' or
related undertakings') employees, agents, advisers, consultants or
contractors who:
(a) is engaged in the management or operation of the Supply
Business; and
(b) is in possession of or has access to confidential information
shall not use such information in a manner which may obtain for the
Licensee (or any affiliate or related undertaking of the Licensee) any
commercial advantage in the operation of the Supply Business or the
Second Tier Supply Business.
3. In this Condition:
"confidential information" bears the meaning given at paragraph 1.
232
<PAGE>
Condition 42. Compliance with the Grid Code
- -------------------------------------------
1. The Licensee shall comply with the provisions of the Grid Code in so
far as applicable to it.
2. The Director may (following consultation with the Transmission Company)
issue directions relieving the Licensee of its obligation under
paragraph 1 in respect of such parts of the Grid Code and to such
extent as may be specified in those directions.
233
<PAGE>
Condition 43. Security arrangements
- -----------------------------------
1. The Licensee shall comply with the provisions of the Fuel Security Code
and such provisions shall have effect as if they were set out in this
Licence.
234
<PAGE>
Condition 44. Pooling and Settlement Agreement
- ----------------------------------------------
1. The Licensee shall be a pool member under, and comply with the
provisions of, the Pooling and Settlement Agreement.
235
<PAGE>
Condition 45. Conditions of supply affecting customers' statutory rights
- ------------------------------------------------------------------------
1. The Licensee shall not include in or send with any notice given under
Section 16(3) of the Act, or any form provided to customers for use in
giving notice under Section 16(2) of the Act, or any notice sent to
customers prior to their entering into a tariff or special agreement,
an invitation to agree to anything which, by virtue of the Act, may
only be done or (as the case may be) not done:
(a) with the agreement of that customer; or
(b) in any case where that customer withholds his agreement or
makes that agreement subject to terms and conditions to which
the Licensee objects, with the approval or consent or by order
of the Secretary of State
unless the form and terms of such invitation have first been submitted
to and approved by the Director.
2. Nothing in paragraph 1 shall prevent the Licensee from:
(a) inviting or requiring a customer to take a supply of
electricity under a special agreement in accordance with
Section 22 of the Act; or
(b) including in any such notice any provision or condition which
the Licensee is required or permitted to include in such
notice by virtue of Section 16(4) of the Act.
3. The Licensee shall include in any form provided to a customer for use
in giving notice under Section 16(2) of the Act a prominent statement
of the right of such customer to apply to the Director for the
determination of any dispute arising out of the proposed terms of
supply.
236
<PAGE>
Condition 46. Code of practice on payment of bills and guidance for dealing
- --------------------------------------------------------------------------
with customers in difficulty
- ----------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice concerning the payment
of electricity bills by its Domestic Customers, including appropriate
guidance for the assistance of such customers who, through misfortune
or inability to cope with electricity supplied on credit terms, may
have difficulty in paying such bills.
2. The code of practice shall include procedures by which the Licensee can
distinguish customers in difficulty (the "relevant customers") from
others in default and can:
(a) provide general information as to how relevant customers might
reduce their bills in the future by the more efficient use of
electricity;
(b) where such a facility is available, accept in payment for
electricity supplied sums which are deducted at source from
social security benefits payable to relevant customers;
(c) detect failures by relevant customers to comply with
arrangements entered into for paying by instalments charges
for electricity supplied;
(d) make such arrangements so as to take into account the
customers' ability to comply with them;
(e) ascertain with the assistance of other persons or
organisations, the ability of customers to comply with such
arrangements;
237
<PAGE>
(f) provide for customers who have failed to comply with such
arrangements, or procure for them the provision of, a
prepayment meter (where safe and practicable to do so); and
(g) arrange for the calibration of any prepayment meter so
provided so as to take into account the customers' ability to
pay any of the charges due from them under such arrangements
in addition to the other charges lawfully being recovered
through the prepayment meter.
3. In formulating the procedures referred to at paragraph 2 the Licensee
shall have particular regard:
(a) to the purpose of avoiding, in so far as is practicable, the
disconnection of premises occupied by relevant customers
otherwise than following compliance by the Licensee with such
procedures; and
(b) to the interests of relevant customers who are of pensionable
age or disabled or chronically sick and to the purpose of
avoiding, in so far as is practicable, the disconnection of
premises occupied by such customers during the winter months
of each year,
and the procedures shall be designed for the achievement of such
purposes.
4. This Condition is subject to the provisions of Condition 52.
238
<PAGE>
Condition 47. Provision of supply services for persons who are of pensionable
- -----------------------------------------------------------------------------
age or disabled or chronically sick
- -----------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice detailing the special
services the Licensee will make available for Domestic Customers who
are of pensionable age or disabled or chronically sick.
2. The code of practice shall include arrangements by which the Licensee
will where appropriate, in respect of its customers:
(a) provide where practicable special controls and adaptors for
electrical appliances and meters (including prepayment meters)
and reposition meters (and shall set out any charges to be
made for the provision of such services);
(b) provide special means of identifying persons acting on behalf
of the Licensee;
(c) give advice on the use of electricity;
(d) send bills in respect of the supply of electricity to a
customer to any person who is willing to be sent such bills
and is nominated by that customer (without prejudice, however,
to the right of the Licensee to send such bills both to the
customer and to the nominated person where that appears
appropriate to the Licensee);
(e) make available (free of charge) to blind and partially sighted
customers, by telephone or other appropriate means,
information concerning the details of any bill relating to the
supply of electricity to them and a facility for enquiring or
complaining in respect of any such bill or any service
provided by the Licensee; and
239
<PAGE>
(f) make available (free of charge) to deaf and hearing impaired
customers, being in possession of appropriate equipment,
facilities to assist them in enquiring or complaining about
any bill relating to the supply of electricity to them or any
service provided by the Licensee.
3. The code of practice shall further include arrangements whereby the
Licensee will:
(a) take reasonable steps to draw the attention of its customers
to the existence of a register of customers who may be
expected, by virtue of being of pensionable age or disabled or
chronically sick, to require:
(i) information and advice in respect of the matters set
out at paragraph 2; or
(ii) advance notice of interruptions to the supply of
electricity;
(b) maintain such a register, comprising the relevant details of
each customer who requests his inclusion on it; and
(c) give to those customers so registered such information and
advice in respect of the matters set out at paragraph 2 or in
respect of interruptions to the supply of electricity as may
be appropriate and is of such nature as shall be set out in
the code of practice.
4. This Condition is subject to the provisions of Condition 52.
240
<PAGE>
Condition 48. Code of practice on procedures with respect to site access
- ------------------------------------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice setting out the
principles and procedures the Licensee will follow in respect of any
person acting on its behalf who requires access to customers' premises.
2. The code of practice shall include procedures calculated to ensure that
persons visiting customers' premises on behalf of the Licensee:
(a) possess the skills necessary to perform the required duties;
(b) are readily identifiable to members of the public;
(c) use passwords provided for vulnerable customers;
(d) are appropriate persons to visit and enter customers'
premises; and
(e) are able to inform customers, on request, of a contact point
for help and advice they may require in relation to the supply
of electricity.
3. This Condition is subject to the provisions of Condition 52.
241
<PAGE>
Condition 49. Supply Business standards of performance
- ------------------------------------------------------
1. The Licensee shall conduct its Supply Business in the manner which it
reasonably considers to be best calculated to achieve any standards of
overall performance or standards of performance in connection with the
promotion of the efficient use of electricity by customers, as may be
determined by the Director pursuant to Sections 40 and 41 respectively
of the Act.
2. In making payments in accordance with any standards of performance the
Licensee shall not discriminate:
(a) between any persons or class or classes thereof; or
(b) as between the Licensee and any persons or class or classes
thereof.
242
<PAGE>
Condition 50. Efficient use of electricity
- ------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice setting out the ways
in which the Licensee will make available to customers such guidance on
the efficient use of electricity as will, in the opinion of the
Licensee, enable them to make informed judgments on measures to improve
the efficiency with which they use the electricity supplied to them.
Such code of practice shall include, but shall not be limited to:
(a) the preparation and making available free of charge to any
customer who requests it of a statement, in a form approved by
the Director, setting out information and advice for the
guidance of customers in the efficient use of electricity
supplied to them;
(b) the making of arrangements for maintaining sources from which
customers may obtain further information about the efficient
use of electricity supplied to them, including the maintenance
of a telephone information service; and
(c) the preparation and making available free of charge to any
customer who requests it of a statement or statements of
sources (to the extent that the Licensee is aware of the same)
outside the Licensee's organisation from which customers may
obtain additional information or assistance about measures to
improve the efficiency with which they use the electricity
supplied to them, such statement or statements to include
basic information which is publicly available on financial
assistance towards the costs of such measures available from
Central or Local Government or through bodies in receipt of
financial support from Government in connection with measures
to promote the efficiency of energy use.
243
<PAGE>
2. Where the Director (who may have regard to the need for economy,
efficiency and effectiveness before giving directions under this
paragraph) gives directions to do so, the Licensee shall:
(a) review and prepare a revision of the code of practice;
(b) take steps to bring to the attention of customers information
on the efficient use of electricity supplied to them; and
(c) send to each customer a copy of any information published by
the Director pursuant to Section 48 of the Act
in such manner and at such times as will comply with those directions.
3. This Condition is subject to the provisions of Condition 52.
244
<PAGE>
Condition 51. Supply Business complaint handling procedure
- ----------------------------------------------------------
1. The Licensee shall, no later than 1 January 1998, prepare and submit to
the Director for his approval a code of practice detailing the
procedure for handling complaints from customers about the manner in
which the Licensee conducts its Supply Business.
2. Any procedure established in accordance with this Condition shall
specify the periods within which it is intended that different
descriptions of complaint should be processed and resolved.
3. This Condition is subject to the provisions of Condition 52.
245
<PAGE>
Condition 52. Preparation, review of and compliance with customer service codes
- -------------------------------------------------------------------------------
1. This Condition applies to any code of practice required to be prepared
by the Licensee pursuant to Condition 46 to 48 and Condition 50 to 51
of this Licence.
2. In first preparing such a code the Licensee shall, prior to submitting
that code to the Director, consult the Relevant Consumers' Committee
and shall have regard to any representations made by the committee
about such code or the manner in which it is likely to be operated.
3. Where before the expiry of 30 days of the Licensee first submitting
such code to the Director for his approval the Director notifies the
Licensee that the Director considers the code is not sufficient for the
purposes of meeting the requirements of this Licence the Licensee shall
forthwith make such changes as the Director may require.
4. The Licensee shall, whenever requested to do so by the Director, review
such code and the manner in which it has been operated, with a view to
determining whether any modification should be made to it or to the
manner of its operation.
5. In carrying out any such review the Licensee shall consult the Relevant
Consumers' Committee and shall have regard to any representations made
by it about such code or the manner in which it is likely to be or (as
the case may be) has been operated.
6. The Licensee shall submit any revision of such code which, after
consulting the Relevant Consumers' Committee in accordance with
paragraph 5, it wishes to make, to the Director for his approval and
following his approval in writing shall then revise the code.
246
<PAGE>
7. The Licensee shall:
(a) as soon as practicable following the preparation of any code
or any revision made to it send to the Director and the
Relevant Consumers' Committee a copy of such code or such
revision (in each case in the form approved by the Director);
(b) draw the attention of those of its customers to whom such code
applies to the existence of the code and of each substantive
revision of it and to the means by which they may inspect a
copy of such code in its latest form; and
(c) give or send free of charge a copy of such code (as from time
to time revised) to any person who requests it.
8. No changes may be made to any code otherwise than in accordance with
the foregoing procedures.
9. The Licensee shall ensure, so far as reasonably practicable, that it
complies with such arrangements or procedures (as the case may be) as
are contained in or described by any code to which this condition
applies and approved by the Director or any revision to such code
approved by the Director.
247
<PAGE>
Condition 53. Record of and report on Supply Business performance
- -----------------------------------------------------------------
1. The Licensee shall keep a record of its general operation of the
arrangements mentioned in Condition 46 to 51 and if the Director so
directs in writing, of its operation of any particular cases specified,
or of a description specified, by him.
2. The Licensee shall keep a statistical record of the performance of the
Supply Business in relation to the provision of electricity supply to
its Designated Customers under the terms of contracts or in accordance
with tariffs fixed under Section 18 of the Act, including services
relating to:
(a) the amounts of electricity supplied and the recovery of
electricity charges for each of the principal payment methods
and for each set of the contract or tariff terms offered;
(b) the disconnection of customers for non-payment of bills and
breach of payment arrangements agreed following such
non-payment;
(c) the holding of security deposits;
(d) the installation of prepayment meters calibrated to recover
customer debts;
(e) the offering of appointments and the making of visits to
customers' premises;
(f) the response made to enquiries concerning electricity supply
matters;
(g) the nature of guidance as to the efficient use of electricity
given and the measures to improve the efficient use of
electricity introduced by the Licensee; and
248
<PAGE>
(h) payments made to customers pursuant to the standards of
performance prescribed by the Director in accordance with
regulations made under Section 39 of the Act or in accordance
with paragraph 2 of Condition 22.
3. The Licensee shall, from time to time as required by the Director,
provide to the Director and to the Relevant Consumers' Committee such
of the information contained in the records prepared in accordance with
paragraphs 1 and 2 as the Director may request in writing.
4. As soon as is reasonably practicable after the end of each calendar
year, the Licensee shall submit to the Director and the Relevant
Consumers' Committee a report dealing with the matters mentioned in
paragraphs 1 and 2 in relation to that year and shall:
(a) publish the report so submitted in such manner as will in the
reasonable opinion of the Licensee secure adequate publicity
for it; and
(b) send a copy of it free of charge to any person requesting one,
except that, in performing its obligations under sub-paragraphs 4(a)
and (b), the Licensee shall exclude from the report such information as
appears to it to be necessary or expedient to ensure that, save where
they consent, individual Designated Customers referred to therein
cannot readily be identified.
5. The report shall be presented, so far as is reasonably practicable, in
a standard form designated by the Director for the purposes of this
Condition.
249
<PAGE>
Condition 54. Information given to Designated Customers
- -------------------------------------------------------
1. The Licensee shall keep each of its Designated Customers (save insofar
as he receives an unmetered supply) informed of the amount of
electricity which, since he was last informed, its records show as
having been consumed by that customer:
(a) according to the meter through which he is supplied; or
(b) where no meter reading is available, according to the estimate
of the Licensee.
2. The Licensee shall keep each of its Designated Customers informed:
(a) that the Relevant Consumers' Committee or the Director can
assist in resolving complaints which the Licensee has not
resolved to the customer's satisfaction; and
(b) of how the appropriate office of the Committee or the Director
can be contacted.
3. The Licensee may discharge its duties under paragraphs 1 and 2 by
providing the relevant information on or with each bill or statement
given to a customer in respect of charges for the supply of
electricity, and annually to each customer to whom no such bills or
statements are rendered.
250
<PAGE>
Condition 55. Publication of information to customers
- -----------------------------------------------------
1. Subject to paragraph 3, the Licensee shall inform each of its customers
of a number or numbers ("the Supply Number(s)") relevant to the
registration, under the Master Registration Agreement, of a supplier of
electricity to the premises owned or occupied by such customer:
(a) in a form in accordance with the terms of a direction issued
by the Director, on each bill or statement given to the
customer in relation to the supply of electricity; and
(b) annually where the customer does not receive such a bill or
statement.
2. The Supply Number shall consist of a number of data items, each of
which shall be represented by a numerical identifier which shall:
(a) have the number of digits specified in a direction issued by
the Director;
(b) be approved by the Director; and
(c) be used by the Licensee in common with all Electricity
Suppliers.
3. The Director may issue a direction relieving the Licensee of its
obligation under paragraphs 1 and 2 to such extent and
subject to such terms and conditions as he may specify in that
direction.
251
<PAGE>
Condition 56. Relations with the Relevant Consumers' Committee
- --------------------------------------------------------------
1. The Licensee shall meet with the Relevant Consumers' Committee whenever
requested to do so by that committee, up to a maximum of six times in
every year during the period of this Licence.
2. Without prejudice to paragraph 1, the Licensee shall meet the Relevant
Consumers' Committee at least once in every year during the period of
this Licence.
3. In at least one meeting with the Relevant Consumers' Committee in every
year during the period of this Licence, the Licensee shall be
represented by one or more directors of the Licensee.
252
<PAGE>
Condition 57. Health and safety of employees
- --------------------------------------------
1. The Licensee shall, together with all other licensees, consult with
appropriate representatives of persons employed by itself and by those
licensees in order to establish and maintain an appropriate machinery
or forum for the joint consideration of matters of mutual concern in
respect of the health and safety of such persons.
2. In this Condition:
"licensees" means all holders of licences granted under
Section 6(1)(a), 6(1)(b), 6(1)(c) and 6(2)
of the Act.
253
<PAGE>
Condition 58. Designated Premises
- ---------------------------------
1. For the purposes of this Licence, the question whether any premises are
"Designated Premises" shall be determined in accordance with the
provisions of this Condition.
2. Premises are Designated Premises if they are either:
(a) Domestic Premises; or
(b) premises at which, in the reasonable expectation of the
Licensee at the time of entering into a contract for the
supply of electricity to such premises, the normal annual
consumption of electricity will amount to no more than 12,000
kWh,
but excluding premises referred to at sub-paragraph (b) which receive
an unmetered supply, or which are supplied through half-hourly or
maximum demand metering equipment or under the terms of a multi-site
contract.
3. For the purposes of this Condition, a "multi-site contract" is a
contract for the supply of electricity both to any premises which do
not fall within the terms of sub-paragraphs 2(a) or (b) and to one or
more other premises (not being Domestic Premises), all of which
premises are owned or occupied by:
(a) the same person or body of persons whether corporate or
unincorporate; or
(b) an undertaking (the "principal undertaking") and any holding
company, subsidiary, or subsidiary of the holding company of
that principal undertaking, or any other undertaking in which
the principal undertaking has a participating interest.
254
<PAGE>
4. Any premises supplied by the Licensee which (in accordance with
paragraphs 1 to 3) were not Designated Premises at the time at which
the Licensee entered into a contract for their supply shall,
notwithstanding subsequent changes to the nature or level of the
consumption of electricity at those premises, not become Designated
Premises for the purposes of this Licence prior to the time at which
they cease to be supplied by the Licensee.
5. Any premises supplied by the Licensee which (in accordance with
paragraphs 1 to 3) were Designated Premises at the time at which the
Licensee entered into a contract for their supply shall cease to be
Designated Premises for the purposes of this Licence where:
(a) they have been continuously supplied by the Licensee for a
period of at least 12 months and:
(i) they are not, or are no longer, Domestic Premises;
and
(ii) it is reasonably to be expected that the normal
annual consumption of electricity at the premises
will amount to more than 12,000 kWh; or
(b) (not being, or being no longer, Domestic Premises) the
premises commence receipt of an unmetered supply or a supply
through half-hourly or maximum demand metering equipment or
under the terms of a multi-site contract.
6. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"maximum demand metering means metering equipment which is capable of
equipment" recording the demand for electricity supplied to
premises during the half hour of maximum demand
in any period of supply.
</TABLE>
255
<PAGE>
Condition 59. Terms for supply of electricity incompatible with Licence
- -----------------------------------------------------------------------
Conditions
- ----------
1. Without prejudice to its rights and obligations under the Act, the
Licensee shall not enter into, offer to enter into or enter into a
variation of any contract for the supply of electricity to a customer
at Designated Premises otherwise than on terms which comply with the
Licensee's obligations under this Licence.
2. The Licensee shall not enforce or take advantage of any term of a
contract for the supply of electricity to a customer at Designated
Premises if the inclusion of that term was in breach of the provisions
of this Licence.
3. The Licensee shall not take advantage of the omission of any term from
a contract for the supply of electricity to a customer at Designated
Premises if the omission of that term was in breach of the provisions
of this Licence.
256
<PAGE>
Condition 60. Limitation on requirements for termination fees
- -------------------------------------------------------------
1. Where the Licensee enters into any Designated Supply Contract in the
circumstances set out at paragraph 2 it may not in such contract
provide for the payment of any termination fee by the Designated
Customer.
2. Paragraph 1 applies in respect of any Designated Supply Contract
entered into prior to the date which is 90 days following the earliest
date specified (and not subsequently withdrawn or varied to a later
date) in any direction or variation of a direction issued by the
Director, pursuant to condition 3 of the licence held by any Second
Tier Supplier, in relation to the supply of electricity to all premises
within the authorised area.
257
<PAGE>
Condition 61. Revision of the Contract Terms Conditions
- -------------------------------------------------------
1. The Director, in accordance with the provisions of this Condition, may
from time to time review (in whole or in part) the provisions and
operation of the Contract Terms Conditions in the licences of all
Electricity Suppliers with a view to establishing whether any revision
should be made to the Contract Terms Conditions in all such licences.
2. At the commencement of any review by the Director, the Director shall:
(a) give to all Relevant Parties a notice in writing which sets
out the terms of the review and of any proposals in connection
therewith and which invites the submission of any
representations by a specified date (being not less than 28
days after the date of the notice); and
(b) publish such notice or an accurate summary of it in a manner
which will, in the opinion of the Director, secure adequate
publicity for it.
3. On receiving from the Director notice of such a review the Licensee may
submit any representations on matters within the terms of the review by
the date specified in the notice.
4. As soon as practicable following the completion of any such review, the
Director shall send to each Relevant Party, and to any person who has
made representations to him by virtue of the notice published under
sub-paragraph 2(b), a copy of:
(a) a report on the outcome of such review;
258
<PAGE>
(b) any revisions which he proposes to make, having regard to any
representations received during such review, to the Contract
Terms Conditions in the licences of all Electricity Suppliers;
(c) a statement of his reasons for proposing those revisions; and
(d) a notice specifying the time (being not less than 28 days from
the date the Director issues the notice) within which
Electricity Suppliers which are entitled to supply electricity
to Designated Premises shall state whether or not they consent
to the proposed revisions to the Contract Terms Conditions in
their licences.
5. A revision proposed to be made by the Director to the Contract Terms
Conditions of all Electricity Suppliers may be made only where the
Director is satisfied that the figures determined in accordance with
paragraphs 6 and 7 (expressed as a percentage) are each not less than
90 per cent.
6. The figure determined in accordance with this paragraph shall be
calculated under the following formula:
C x 100
---
C+N
where:
C = the number of Designated Premises supplied on contract by
consenting Electricity Suppliers; and
N = the number of Designated Premises supplied on contract by
non-consenting Electricity Suppliers
259
<PAGE>
as estimated (in each case) by the Director on the basis of the
information most recently available to him.
7. The figure determined in accordance with this paragraph shall be
calculated under the following formula:
C x 100
---
C+N
where:
C = the number of consenting Electricity Suppliers; and
N = the number of non-consenting Electricity Suppliers.
8. In paragraphs 6 and 7 the expressions "consenting" and "non-consenting"
refer (as the case may be) to the consent or otherwise of Electricity
Suppliers which are entitled to supply electricity to Designated
Premises to the proposed revision to the Contract Terms Conditions in
their licences.
9. Where the Director is satisfied that the figures determined in
accordance with paragraphs 6 and 7 (expressed as a percentage) are each
not less than 90 per cent the Director may amend the Contract Terms
Conditions of the Licensee in accordance with the proposed revision.
10. No revision made to the Contract Terms Conditions by virtue of this
Condition may introduce an obligation in respect of any matter other
than one which:
(a) is provided for, or is reasonably ancillary to a matter
provided for, under the Contract Terms Conditions on the date
on which such Conditions come into force;
260
<PAGE>
(b) concerns the terms of contracts offered or entered into by the
Licensee for the supply of electricity to Designated Premises;
or
(c) concerns any dealings with customers by or on behalf of the
Licensee prior to and for the purpose of offering or entering
into contracts for the supply of electricity to Designated
Premises.
11. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"Relevant Parties" means the Licensee, all other Electricity
Suppliers, the Electricity Consumers' Committees
and such other persons or bodies as in the opinion
of the Director are representative of those likely to
be affected by a revision to the Contract Terms
Conditions.
</TABLE>
261
<PAGE>
Sub-Section (2) The Contract Terms Conditions
---------------------------------------------
Condition 62. Designated Supply Contracts
- -----------------------------------------
1. A Designated Supply Contract is a contract for the supply of
electricity to Designated Premises, as varied from time to time, which
complies with the provisions of this Condition.
2. Without prejudice to its rights and obligations under the Act, the
Licensee shall not supply electricity to Designated Premises on
contract except under a Designated Supply Contract.
3. A Designated Supply Contract shall:
(a) be in a standard form, save that there may be different forms
for different areas, cases and circumstances;
(b) set out all the terms and conditions, including terms as to
price, on which the Licensee will supply electricity in the
relevant case; and
(c) contain terms reflecting the termination provisions of
Condition 66 and 67.
4. Any Designated Supply Contract for both the supply of electricity and
the provision of goods or services shall identify separately the charge
for that supply from the charge for the goods or services.
262
<PAGE>
5. Where a Designated Supply Contract may be terminated by a customer by
virtue of any provision included in that contract in compliance with
Condition 66 and 67, the Licensee may at its discretion accept a lesser
period of notice than is specified in that provision.
6. Nothing in this Licence shall prevent the Licensee from entering into a
Designated Supply Contract which contains provisions for its
termination that are additional to and do not derogate from those set
out at Condition 66 and 67.
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Condition 63. Contractual terms
- -------------------------------
1. Where the Licensee offers to supply electricity to Domestic Premises
under Designated Supply Contracts, it shall have available forms of
Designated Supply Contract which provide for the payment of charges for
electricity supplied to Domestic Premises:
(a) by prepayment through a prepayment meter;
(b) by different methods, including:
(i) by cash, at such places and to such persons as are
reasonable in all the circumstances; and
(ii) by cheque, and
(c) at a reasonable range of different intervals, including:
(i) paying monthly a predetermined sum; and
(ii) paying quarterly in arrears.
2. Before entering into any contract to supply electricity to Domestic
Premises (other than through a prepayment meter) the Licensee shall
inform the customer of and offer to enter into Designated Supply
Contracts which comply with sub-paragraphs 1(b) and (c).
3. The Licensee shall process all requests for a supply of electricity to
Designated Premises without undue preference or undue discrimination.
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4. The Licensee shall send copies of each of the forms of Designated
Supply Contract (as revised from time to time) under which it supplies
or offers to supply electricity:
(a) on receipt of a request, to any person; and
(b) not later than the date on which it first offers to supply
electricity under each such form of Designated Supply Contract
(or revision thereof), to the Director.
5. The Licensee shall prepare, in respect of each form of Designated
Supply Contract:
(a) a document which sets out an accurate summary of the Principal
Terms of that form of Designated Supply Contract; and
(b) particulars of inducements offered to any person entering into
such a contract which might reasonably be expected materially
to influence the decision whether or not to enter into it.
6. The Licensee shall publish the documents and particulars referred to at
paragraph 5 in a manner that will in the opinion of the Licensee secure
adequate publicity for them, and shall send copies of them to the
Director no later than the date on which they are published.
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Condition 64. Notification of terms
- -----------------------------------
1. Before entering into any Designated Supply Contract the Licensee shall
take all reasonable steps to draw the attention of the customer to the
Principal Terms of the contract.
2. Where the Licensee has entered into a Designated Supply Contract it
shall (except where it has already done so) provide the customer within
2 working days of the date of the contract with a copy of its full
terms and conditions.
3. Subject to paragraph 4 the Licensee shall, at least 30 days before any
Designated Supply Contract to supply electricity for a specified period
is due to expire, send to the customer:
(a) a written offer to enter into a new contract for supply from
the date of expiry of the existing contract, drawing the
attention of the customer to the Principal Terms relevant to
that offer;
(b) an accurate summary of the Principal Terms of other contracts
which the Licensee will make available to the customer; and
(c) details of how the customer can obtain continuity of supply
from the Licensee.
4. Paragraph 3 shall not apply where:
(a) the customer has informed the Licensee that he does not wish
to continue to be supplied by it after the expiry of the
existing contract; or
(b) it is not reasonable in all the circumstances for the Licensee
to be required to continue to supply that customer and the
Licensee has (at least 30 days before the contract was due to
expire) both notified the customer to that effect and informed
him that he must make arrangements to obtain a supply from
another Electricity Supplier.
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5. Where a Designated Supply Contract allows for its unilateral variation
(in any respect) by the Licensee and is so varied to the significant
disadvantage of the customer, the Licensee shall within 10 days of the
variation give to the customer written notice:
(a) of the variation;
(b) of the customer's right to terminate the contract; and
(c) of the effect of paragraph 6.
6. Where a customer gives to the Licensee a valid notice of termination
within 14 days of receiving notice under paragraph 5, the Licensee
shall treat the variation as ineffective and shall neither enforce nor
take advantage of it.
7. Where the Licensee believes that any of its customers no longer
occupies or is about to vacate Designated Premises to which it supplies
electricity, it shall as soon as reasonably practicable provide any new
occupier of those premises with an accurate summary of the Principal
Terms of contracts it will make available to him.
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Condition 65. Security deposits
- -------------------------------
1. The Licensee shall not, in respect of the supply of electricity under
any Designated Supply Contract, require a deposit:
(a) where the customer is prepared to be supplied through a
prepayment meter and it is reasonably practicable in all the
circumstances (including in particular the risk of loss or
damage) for the Licensee to provide such a meter; or
(b) where it is otherwise unreasonable in all the circumstances
to do so.
2. Any deposit required of a Designated Customer may be 1 1/2 times the
value of the average quarterly consumption of electricity reasonably
expected at the relevant premises, or more if that is reasonable in all
the circumstances.
3. Where the Licensee requires a deposit of a Designated Customer it shall
at the same time inform that customer of the effect of paragraphs 5 and
7.
4. Where the Licensee holds any deposit it shall pay interest, at a rate
it shall fix from time to time with the approval of the Director, on
every sum of 50p deposited for every 3 months during which that sum is
held.
5. Subject to paragraph 6, any deposit given by a Designated Customer
shall be repaid (with interest) by the Licensee:
(a within 14 days where, in the previous 12 months, the
customer has paid all charges for electricity supplied within
28 days of each written demand made; or
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(b) as soon as reasonably practicable, and in any event within 1
month, where the Licensee has ceased to supply the customer
and the customer has paid all charges for electricity
supplied.
6. Sub-paragraph 5(a) shall not apply where it is reasonable in all the
circumstances for the Licensee to retain the deposit.
7. Any dispute arising under this Condition between the Licensee and a
Designated Customer may be referred by either party to the Director.
The Director shall determine any such dispute, following such practice
and procedure as he considers appropriate.
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Condition 66. Termination of contracts on notice
- ------------------------------------------------
1. Each Designated Supply Contract shall contain a term allowing the
customer to terminate such contract at any time by:
(a) giving to the Licensee a valid notice of termination; and
(b) subject to paragraph 6, paying to the Licensee on demand a
termination fee.
2. A notice of termination is valid where it is given at least 28 days in
advance of the date on which it is to take effect and where, not later
than that date, the requirements of paragraphs 3 and (unless the
Licensee expressly agrees to waive it) 4 are satisfied.
3. The requirement of this paragraph is that either:
(a) another Electricity Supplier commences a supply of
electricity to the relevant premises; or
(b the relevant premises are cut off because the customer at
those premises has ceased to require a supply.
4. The requirement of this paragraph is that no charges for electricity
supplied to the customer (whether at the relevant premises or at any
premises previously occupied by him), having been demanded in writing
prior to the notice of termination being given, remain owing to the
Licensee more than 28 days after that demand was made.
5. Each Designated Supply Contract shall provide that a notice of
termination which is not valid shall not be effective to terminate such
contract.
6. A termination fee shall not be demanded of a customer where:
(a) the contract was terminated under any provision of Condition
67;
(b the contract was a contract of indefinite length, and was
terminated other than during a fixed term period;
(c the Licensee notified the customer, under paragraph 5 of
Condition 64, of a unilateral variation of the contract and
the customer gave notice of termination in accordance with
paragraph 6 of that Condition; or
(d) the contract was a contract to which paragraph 4 of Condition
67 applied and the Licensee did not, before entering into it,
take all reasonable steps to draw the attention of the
customer to the effect of the term set out at that paragraph.
7. Where a termination fee is payable, it shall be of an amount not
greater than that which the Licensee may in all the circumstances
reasonably require.
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Condition 67. Termination of contracts in specified circumstances
- ------------------------------------------------------------------
1. Each Designated Supply Contract shall provide that the contract will
terminate:
(a) on the date on which the customer ceases to own or occupy the
relevant premises, having given the Licensee at least 2
working days' notice of that date; or
(b) where the customer has ceased to own or occupy the premises
without giving the Licensee at least 2 working days' notice,
on the first in time of:
(i) the second working day after he has given notice to
the Licensee;
(ii) the next day on which the meter is due to be read;
and
(iii) the date on which any subsequent owner or occupier
enters into a contract or tariff agreement for the
supply of electricity to the premises.
2. Each Designated Supply Contract shall provide that where it is
terminated by virtue of a term included in the contract in compliance
with paragraph 1, the customer shall remain liable for any charges for
the supply of electricity until the date of termination.
3. Each Designated Supply Contract shall provide that it may be terminated
immediately by either party at any time after the Director or the
Secretary of State has revoked this Licence.
4. Any Designated Supply Contract which:
(a) provides for the Licensee to supply electricity for a
specified period of more than 12 months; or
(b contains an initial fixed term period,
shall provide that it may be terminated immediately by the customer at
any time within 5 working days of the date of the contract.
5. Where a Designated Supply Contract is for both the supply of
electricity and the provision of goods or services:
(a) any reference in the Contract Terms Conditions to its
termination is a reference to its termination in respect of
the supply of electricity alone; and
(b on its termination by virtue of any provision of the Contract
Terms Conditions, the Licensee may require the customer to
give any reasonable security for his future compliance with
the contract for the provision of goods or services.
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Condition 68. Assignment of outstanding charges
- -----------------------------------------------
1. This Condition shall apply where:
(a) the Licensee has commenced the supply of electricity to
Domestic Premises at which a supply was previously given to
its customer by the Previous Supplier;
(b) the customer has failed to pay, within 28 days of receiving a
demand in writing, any charges due from him to the Previous
Supplier for the supply of electricity at those premises;
(c) that failure occurred after either the Previous Supplier was
informed of the change of supplier or the Licensee commenced
supply to the premises (whichever is the earlier);
(d the Previous Supplier has given written notice to the customer
that it proposes to assign the debt to the Licensee, which may
be entitled to reclaim from him its costs in recovering the
debt; and
(e) the Licensee has received from the Previous Supplier a notice
in accordance with paragraph 2.
2. A notice in accordance with this paragraph is one which:
(a) is given at least 14 days after the notice referred to at
sub-paragraph 1(d) and is received by the Licensee within 90
days of it commencing a supply to the premises;
(b specifies the amount of the debt which remains unpaid;
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(c) states that the Previous Supplier has used all reasonable
endeavours to recover the debt, which remains unpaid at least
42 days after being demanded in writing; and
(d states that the Previous Supplier intends to assign to the
Licensee the debt, up to a maximum sum of one-third of the
value (calculated in accordance with the charges of the
Previous Supplier to the customer immediately before it ceased
to supply him) of the average annual consumption reasonably
expected of the customer.
3. Where this Condition applies the Licensee shall, within 60 days of
receiving a notice under paragraph 2 and in consideration of the
assignment of the debt, pay to the Previous Supplier the sum specified
under sub-paragraph 2(d) (less, where they cannot be reclaimed from the
customer, its reasonable costs of recovering that debt).
4. For the purposes of this Condition, a customer shall not be regarded as
being in debt to the Previous Supplier to the extent to which that debt
is genuinely in dispute.
5. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"Previous Supplier" means, in relation to any premises, the Electricity
Supplier which supplied electricity to those
premises immediately prior to the commencement
of supply by the Licensee.
</TABLE>
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Condition 69. Modification of provisions under Condition 66 and 68
- ------------------------------------------------------------------
1. In this Condition, the "relevant provisions" are the provisions of
paragraph 4 of Condition 66 and Condition 68 of this Licence (or any
of them).
2. Where the Director considers (having regard to any representations made
to him) that in any specified class of cases the relevant provisions do
not fulfil the requirements of paragraph 4, he may direct that they
shall cease to have effect in that class of cases.
3. Where a direction under paragraph 2 has been made and the Director
considers (having regard to any representations made to him) that in
the specified class of cases the relevant provisions would fulfil the
requirements of paragraph 4, he may direct that they shall again have
effect in those cases.
4. The requirements of this paragraph are that, in the specified class of
cases, the operation of the relevant provisions:
(a) significantly reduces the number of unrecovered debts
otherwise to be expected; or
(b) involves expenditure in debt recovery which is less than the
reduction in the value of unrecovered debts which it achieves.
5. Any direction under paragraphs 2 or 3 shall be made by a notice given
to the Relevant Parties which shall specify:
(a) the relevant provisions to which it applies;
(b) the class of cases to which it applies; and
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(c) the date on which it shall have effect (being, in a direction
under paragraph 3, at least 3 months after the notice is
given).
6. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"Relevant Parties" means the Licensee, all other Electricity
Suppliers, the Electricity Consumers' Committees and
such other persons or bodies as in the opinion of the
Director are representative of those likely to be
affected by a revision to the relevant provisions.
</TABLE>
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Condition 70. Marketing of electricity to Designated Customers
- ---------------------------------------------------------------
1. This Condition applies to the marketing activities of the Licensee in
respect of the supply or the proposed supply of electricity to the
Designated Premises.
2. This Condition shall cease to have effect on a date (the "termination
date") which shall be 31 March 2000, provided that:
(a) if the Director, after consultation with the Licensee, all
other Electricity Suppliers, the electricity consumers'
committees and such other persons or bodies as in the opinion
of the Director are representative of those likely to be
affected, gives notice for the purposes of this Condition
generally:
(i) by publishing the notice in such a manner as the
Director considers appropriate for the purpose of
bringing it to the attention of persons likely to be
affected by it; and
(ii) by sending a copy of the notice to all Electricity
Suppliers and electricity consumers' committees,
that he considers that the development of competition in
electricity supply is such as to require the continuation of
any part of this Condition until such date - not later than
two years from the termination date - as may be specified in
the notice (the "new termination date"), then such part of
this Condition as may be specified in the notice shall
continue to apply as if for the termination date there were
substituted the new termination date; and
(b) notice under sub-paragraph (a) may be given on more than one
occasion.
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The Licensee shall:
(a) set up appropriate procedures for the selection of staff
employed or engaged in roles the principal duties of which
involve oral communication with Designated Customers for the
purposes of the marketing activities of the Licensee;
(b) take all reasonable steps to ensure that each such person is
trained so as to have a sufficient understanding of:
(i) the arrangements for competition in electricity
supply in England & Wales; and
(ii) the Principal Terms of Designated Supply Contracts
made available by the Licensee;
such that any relevant advice given by him to Designated
Customers is not misleading;
(c take all reasonable steps to ensure that:
(i) a Designated Customer may readily identify the
Licensee whenever he is contacted by a representative
of the Licensee; and
(ii) any unsolicited contact made on behalf of the
Licensee with any Designated Customer takes place at
a reasonable time; and
(d) take all reasonable steps to ensure that any agents or
sub-contractors of the Licensee set up equivalent procedures
and take equivalent steps to those set out at sub-paragraphs
(a), (b) and (c).
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4. Where a contract has been entered into by a Designated Customer in the
course either of a visit to his premises by a representative of the
Licensee or of a telephone conversation between him and a
representative of the Licensee, the Licensee shall, through a
representative who is not engaged in activities leading to the making
of contracts between the Licensee and customers, and not less than 24
hours nor more than 14 days after the date of the contract:
(a) use its reasonable endeavours to contact the customer by
telephone or by letter seeking his confirmation that:
(i) he understands that he has entered into an
electricity supply contract;
(ii) he is content to have entered into that contract; and
(iii) he is content with the way in which the marketing
activities of the Licensee were conducted;
(b) if in the course of such telephone contact, or within a
reasonable period of the despatch of such a letter, the
customer indicates that he is not content to have entered into
the contract and wishes to terminate it, take all reasonable
steps to ensure that the contract is terminated and, where
reasonably practicable, that the Licensee does not commence a
supply to the customer; and
(c if the response of the customer, alone or when considered with
the responses of other customers, suggests weaknesses in the
methods, systems or personnel employed or engaged by the
Licensee or its agents or sub-contractors for the purpose of
its marketing activities, ensure that all reasonable steps to
remedy the matter are taken.
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5. Where, by virtue of any Designated Supply Contract, electricity is not
to be supplied to premises before the expiry of 60 days after the date
of the contract, the Licensee shall take reasonable steps during the
period after that date and prior to the commencement of supply to keep
the customer informed that he has entered into an electricity supply
contract with the Licensee.
6. The complaint handling procedures to be established by the Licensee in
accordance with Condition 51 shall provide in appropriate cases for the
payment of compensation to Designated Customers adversely affected by
failure by the Licensee to perform its obligations under this
Condition.
7. The Licensee shall keep a record of its compliance with its obligations
under this Condition including-
(a) the contacting of customers in pursuance of sub-paragraph 4(a)
and the response of customers to such contact;
(b the termination of contracts in pursuance of sub-paragraph
4(b); and
(c) compensation paid in pursuance of paragraph 6.
8. Except as the Director may for the purposes of this Condition
determine, as soon as reasonably practicable after the end of each
period of three months ending on 31 March, 30 June, 30 September and 31
December in every year, the Licensee shall submit to the Director and
to all Relevant Electricity Consumers' Committees a report dealing with
the matters specified in paragraph 7 in that period and shall:
(a) publish the report so submitted in such manner as will in the
opinion of the Licensee secure adequate publicity for it; and
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(b) send a copy of it free of charge to any person requesting one,
except that, in performing its obligations under sub-paragraphs (a) and
(b), the Licensee shall exclude from the report such information as
appears to it to be necessary or expedient to ensure that, save where
they consent, individual customers referred to therein cannot readily
be identified.
9. Reports in pursuance of paragraph 8 shall be presented by the Licensee,
in so far as is reasonably practicable, in a standard format submitted
to and approved by the Director for the purposes of this Condition.
10. Except as the Director may approve:
(a) for the purpose of protecting the interests of any Designated
Customer who, prior to the date on which this Condition came
into force, may have made a payment in advance with a view to
arranging a supply of electricity; or
(b) where any payment in advance is wholly or mainly for services
other than arranging the supply of energy,
the Licensee shall not enter into any commercial relations connected
with the supply of electricity to Designated Premises with any person
who has sought, after the coming into force of this Condition, payment
in advance (other than a security deposit) from any Designated Customer
with a view to arranging a supply of electricity, and the Licensee
shall not enter into a contract for the supply of electricity to any
such customer made through the agency (either for the Licensee or for
any customer) of such a person.
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11. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"marketing activities" means any activities of the Licensee directed at
or incidental to the identification of and
communication with Designated Customers
supplied or to be supplied with electricity
by the Licensee, and includes entering into
contracts with such customers.
"representative" in relation to the Licensee, means any person
directly or indirectly authorised to represent the
Licensee in its dealings with customers.
</TABLE>
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SECTION C. COMMON OBLIGATIONS
Condition 71. Separate accounts for Separate Businesses
- -------------------------------------------------------
1. The first financial year of the Licensee shall run from 1st April 1990
to 31st March 1991, and thereafter each financial year of the Licensee
shall run from 1st April to the following 31st March.
2. The remaining paragraphs of this Condition apply for the purpose of
ensuring that the Licensee (and any affiliate or related undertaking)
maintains accounting and reporting arrangements which enable separate
accounts to be prepared for each Separate Business and showing the
financial affairs of each such Separate Business.
3. The Licensee shall in respect of each Separate Business:
(a) keep or cause to be kept for the period referred to in Section
222(5)(b) of the Companies Act 1985 and in the manner referred
to in that section such accounting records in respect of each
Separate Business as would by Section 221 of the Companies Act
1985 be required to be kept in respect of each such business
if it were carried on by a separate company, so that:
(i) the revenues, costs, assets, liabilities, reserves
and provisions of, or reasonably attributable to,
each Separate Business are separately identifiable in
the books of the Licensee (and any affiliate or
related undertaking) from those of any other
business; and
(ii) the revenues, costs, assets, liabilities, reserves
and provisions of, or reasonably attributable to, the
Existing Generation Business and the New Generation
Business are separately identifiable from each other
in the books of the Licensee (and any affiliate or
related undertaking).
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(b) prepare on a consistent basis from such accounting records in
respect of:
(i) each financial year, accounting statements comprising
a profit and loss account, a balance sheet and a cash
flow statement, together with notes thereto, and
showing separately in respect of each Separate
Business and in appropriate detail the amounts of any
revenue, cost, asset, liability, reserve or provision
which has been either:
(aa) charged from or to any other business
(whether or not a Separate Business)
together with a description of the basis of
that charge; or
(bb) determined by apportionment or allocation
between any Separate Business and any other
business (whether or not a Separate
Business) together with a description of the
basis of the apportionment or allocation;
and
(ii) the first six months of each financial year, an
interim profit and loss account;
(c) procure, in respect of the accounting statements prepared in
accordance with this Condition in respect of a financial year,
a report by the Auditors and addressed to the Director stating
whether in their opinion those statements have been properly
prepared in accordance with this Condition and give a true and
fair view of the revenues, costs, assets, liabilities,
reserves and provisions of, or reasonably attributable to, the
Separate Business to which the statements relate; and
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(d) deliver to the Director a copy of the account referred to in
sub-paragraph (b)(ii), the Auditors' report referred to in
sub-paragraph (c) and the accounting statements referred to in
sub-paragraph (b)(i) as soon as reasonably practicable, and in
any event not later than three months after the end of the
period to which it relates in the case of the account referred
to in sub-paragraph (b)(ii) and six months after the end of
the financial year to which they relate in the case of the
accounting statements and Auditors' report referred to in
sub-paragraphs (b)(i) and (c).
4. Unless the Director so specifies in directions issued for the purposes
of this Condition or with his prior written approval the Licensee shall
not in relation to the accounting statements in respect of a financial
year change the bases of charge or apportionment or allocation referred
to in sub-paragraph 3(b)(i) from those applied in respect of the
previous financial year.
5. Where, in relation to the accounting statements in respect of a
financial year, the Licensee has changed such bases of charge or
apportionment or allocation from those adopted for the immediately
preceding financial year, the Licensee shall, if so directed in
directions issued by the Director, in addition to preparing accounting
statements on those bases which it has adopted, prepare such accounting
statements on the bases which applied in respect of the immediately
preceding financial year.
6. Accounting statements in respect of a financial year prepared under
sub-paragraph 3(b)(i) shall, so far as reasonably practicable and
unless otherwise approved by the Director having regard to the purposes
of this Condition:
(a) have the same content and format (in relation to each Separate
Business) as the annual accounts of the Licensee prepared
under Section 226 and, where appropriate, Section 227 of the
Companies Act 1985 and conform to the best commercial
accounting practices including all relevant accounting
standards issued by the member bodies of the Consultative
Committee of Accounting Bodies currently in force;
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(b) state the accounting policies adopted; and
(c) (with the exception of the part of such statement which shows
separately the amounts charged, apportioned or allocated and
describes the bases of charge or apportionment or allocation
respectively and with the exception of the accounting
statements relating to the Second Tier Supply Business), be
published with the annual accounts of the Licensee.
7. Unless the accounting statements prepared under sub-paragraph 3(b)(i)
are prepared on the current cost basis as provided by the alternative
accounting rules, the Licensee shall, unless otherwise agreed by the
Director, in addition to preparing those accounting statements under
that paragraph, prepare accounting statements for each Separate
Business covering the same period, which shall comprise and show
separately:
(a) a profit and loss account, a balance sheet and a cash flow
statement, together with notes thereto, which shall:
(i) include in respect of current cost assets amounts
determined on the current cost basis as provided by
the alternative accounting rules; and
(ii) show or disclose the information and other matters
required by the alternative accounting rules to be
shown or disclosed in accounts where the amounts
included in respect of assets covered by any items
shown in those accounts have been determined on any
basis mentioned in paragraph 31 of Section C of Part
II of Schedule 4 to the Companies Act 1985;
(b) in respect of each Separate Business the adjusted amount of
any such provision for depreciation as is referred to in
paragraph 32(2) of Section C of Part II of Schedule 4 to the
Companies Act 1985 and the items shown in the profit and loss
account of the Separate Business for the relevant period which
are affected by the determination of amounts on the current
cost basis as provided by the alternative accounting rules,
including the profit (or loss) before taxation; and
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(c) such other current cost information as is referred to in the
Handbook as the Director may reasonably require
and shall deliver the same, together with an Auditors' report prepared
in relation to the current cost basis accounting statements in the form
referred to in sub-paragraph 3(c), to the Director within the time
limit referred to in sub-paragraph 3(d), and shall (with the exception
of the part of such statement which shows separately the amounts
charged, apportioned or allocated and describes the bases of charge or
apportionment or allocation respectively and with the exception of the
accounting statements relating to the Second Tier Supply Business)
publish the same with the annual accounts of the Licensee.
8. References in this Condition to costs or liabilities of, or reasonably
attributable to, any Separate Business shall be construed as excluding
taxation, capital liabilities which do not relate principally to a
particular Separate Business, and interest thereon; and references to
any profit and loss account shall be construed accordingly.
9. Without prejudice to paragraph 1 of Condition 1, references in this
Condition to sections of the Companies Act 1985 are references to those
provisions as amended, substituted or inserted by the relevant
provisions of the Companies Act 1989 and if such provisions of the
Companies Act 1989 are not in force at the date of grant of this
Licence shall be construed as if such provisions were in force at such
date.
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10. For the purposes of paragraph 7:
<TABLE>
<CAPTION>
<S> <C>
"alternative accounting rules" means the rules set out in Section C of Part II of
Schedule 4 to the Companies Act 1985.
"current cost assets" means assets of any description mentioned in
paragraph 31 of Section C of Part II of Schedule
4 to the Companies Act 1985.
"the Handbook" means the handbook issued by the Accounting
Standards Committee of the Consultative
Committee of Accounting Bodies (CCAB
Limited) or any successor body entitled
"Accounting for the effects of changing prices:
a Handbook" in its current edition for the time
being or in the event that no such handbook
shall be in issue such guidance or publication
as may be issued in replacement or substitution
therefor.
</TABLE>
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Condition 72. Restriction on activity and financial ring fencing
- ----------------------------------------------------------------
1. Save as provided by paragraphs 3 and 4, the Licensee shall not conduct
any business or carry on any activity other than the Supply Business,
the Second Tier Supply Business and the Distribution Business.
2. The Licensee shall not without the written consent of the Director
acquire shares in any affiliated or related undertaking except:
(a) shares in any body corporate which was a subsidiary of the
Licensee on 17 September 1995 other than a body corporate
carrying on the Generation Business;
(b) shares in a body corporate which conducts business only for a
Permitted Purpose; or
(c) shares acquired in order to avoid dilution of a shareholding
in a body corporate in which the Licensee holds shares in
conformity with this Licence.
3. Nothing in this Condition shall prevent:
(a) any affiliate or related undertaking from conducting any
business or carrying on any activity;
(b) the Licensee from holding shares as, or performing the
supervisory or management functions of, an investor in respect
of any body corporate in which it holds an interest
consistently with the provisions of this Licence;
(c) the Licensee from performing the supervisory or management
functions of a holding company in respect of any subsidiary; or
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(d) the Licensee from carrying on any business or conducting any
activity to which the Director has given his consent in
writing.
4. Nothing in this Condition shall prevent the Licensee conducting
ancillary business as defined in this paragraph so long as the
limitations specified in this paragraph are complied with.
(a) For the purpose of this paragraph "ancillary business" means
any business or activity carried on by the Licensee other than
the Supply Business, the Second Tier Supply Business and the
Distribution Business .
(b) The Licensee may carry on ancillary business provided that
neither of the following limitations is exceeded, namely:
(i) the aggregate turnover of all the ancillary business
of the Licensee does not in any period of twelve
months commencing on 1 April of any year exceed 5% of
the aggregate turnover of the Supply Business, the
Second Tier Supply Business and the Distribution
Business (excluding the turnover on transactions
which the Supply Business, the Second Tier Supply
Business and the Distribution Business make with each
other) as shown by its most recent audited accounting
statements produced under sub-paragraphs (b)(i) and
(c) of paragraph 3 of Condition 71; and
(ii) the aggregate amount (determined in accordance with
sub-paragraph (d) below) of all investments by the
Licensee in all its ancillary business does not at
any time after 17 September 1999 exceed 5% of the sum
of share capital in issue, share premium and
consolidated reserves of the Licensee as shown by its
most recent audited historic cost financial
statements then available.
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(c) For the purpose of sub-paragraph (b) of this paragraph,
"investment" means any form of financial support or assistance
given by or on behalf of the Licensee for the ancillary
business whether on a temporary or permanent basis including
(without limiting the generality of the foregoing) any
commitment to provide any such support or assistance in the
future.
(d) At any relevant time, the amount of an investment shall be the
sum of (i) the value at which such investment was included in
the audited historic cost balance sheet of the Licensee as at
the latest accounting reference date to have occurred prior to
17 September 1999 (or, where the investment was not so
included, zero), (ii) the aggregate gross amount of all
expenditure (whether of a capital or revenue nature) howsoever
incurred by the Licensee in respect of such investment in all
completed accounting reference periods since such accounting
reference date and (iii) all commitments and liabilities
(whether actual or contingent) of the Licensee relating to
such investment outstanding at the end of the most recently
completed accounting reference period.
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Condition 73. Availability of resources
- ---------------------------------------
1. The Licensee shall at all times act in a manner calculated to secure
that it has available to it sufficient management resources, financial
resources and financial facilities to enable it:
(a) to carry on the Supply Business; and
(b) to comply with such of its obligations under the Act and this
Licence as apply to the Supply Business.
2. The Licensee shall submit a certificate addressed to the Director,
approved by a resolution of the board of directors of the Licensee and
signed by a director of the Licensee pursuant to that resolution. Such
certificate shall be submitted in June of each year. Each certificate
shall be in one of the following forms:
(a) "After making enquiries, the directors of the Licensee have a
reasonable expectation that the Licensee will have available
to it, after taking into account in particular (but without
limitation) any dividend or other distribution which might
reasonably be expected to be declared or paid, sufficient
financial resources and financial facilities to enable the
Licensee to carry on the Supply Business for a period of 12
months from the date of this certificate."
(b) "After making enquiries, the directors of the Licensee have a
reasonable expectation, subject to what is said below, that
the Licensee will have available to it, after taking into
account in particular (but without limitation) any dividend or
other distribution which might reasonably be expected to be
declared or paid, sufficient financial resources and financial
facilities to enable the Licensee to carry on the Supply
Business for a period of 12 months from the date of this
certificate. However, they would like to draw attention to the
following factors which may cast doubt on the ability of the
Licensee to carry on the Supply Business...."
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(c) "In the opinion of the directors of the Licensee, the Licensee
will not have available to it sufficient financial resources
and financial facilities to enable the Licensee to carry on
the Supply Business for a period of 12 months from the date of
this certificate."
3. The Licensee shall submit to the Director with that certificate a
statement of the main factors which the directors of the Licensee have
taken into account in giving that certificate.
4. The Licensee shall inform the Director in writing immediately if the
directors of the Licensee become aware of any circumstance which causes
them to no longer have the reasonable expectation expressed in the then
most recent certificate given under paragraph 2.
5. The Licensee shall use its best endeavours to obtain and submit to the
Director with each certificate provided for in paragraph 2 a report
prepared by its auditors and addressed to the Director stating whether
or not the auditors are aware of any inconsistencies between, on the
one hand, that certificate and the statement submitted with it and, on
the other hand, any information which they obtained during their audit
work.
6. The Licensee shall procure from each company or other person which is
at any time an ultimate holding company of the Licensee a legally
enforceable undertaking in favour of the Licensee in the form specified
by the Director that that ultimate holding company ("the Covenantor")
will refrain from any action, and will procure that every subsidiary of
the Covenantor (other than the Licensee and its subsidiaries) will
refrain from any action, which would then be likely to cause the
Licensee to breach any of its obligations under the Act or this
Licence. Such undertaking shall be obtained within 7 days of the
company or other person in question becoming an ultimate holding
company and shall remain in force for as long as the Licensee remains
the holder of this Licence and the Covenantor remains an ultimate
holding company of the Licensee.
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7. The Licensee shall:
(a) deliver to the Director evidence (including a copy of each
such undertaking) that the Licensee has complied with its
obligation to procure undertakings pursuant to paragraph 6;
and
(b) inform the Director immediately in writing if the directors of
the Licensee become aware that any such undertaking has ceased
to be legally enforceable or that its terms have been
breached.
8. The directors of the Licensee shall not declare or recommend a
dividend, nor shall the Licensee make any other form of distribution
within the meaning of Section 263 of the Companies Act 1985, unless
prior to the declaration, recommendation or making of the distribution
(as the case may be) the Licensee shall have issued to the Director a
certificate complying with the following requirements of this
paragraph.
(a) The certificate shall be in the following form:
"After making enquiries, the directors of the Licensee are satisfied:
(i) that the Licensee is in compliance in all material
respects with all obligations imposed on it by
Condition 2, Condition 72, Condition 73, Condition
74, paragraph 5 of Condition 77 and paragraph 2 of
Condition 78 of its public electricity supply
licence; and
(ii) that the making of a distribution of [ ] on [ ] will
not, either alone or when taken together with other
circumstances reasonably foreseeable at the date of
this certificate, cause the Licensee to be in breach
to a material extent of any of these obligations in
the future."
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(b) The certificate shall be signed by a director of the Licensee
and approved by a resolution of the board of directors of the
Licensee passed not more than 14 days before the date on which
the declaration, recommendation or payment will be made.
(c) Where the certificate has been issued in respect of the
declaration or recommendation of a dividend, the Licensee
shall be under no obligation to issue a further certificate
prior to payment of that dividend.
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Condition 74. Credit rating of Licensee
- ---------------------------------------
1. The Licensee shall use all reasonable endeavours to ensure that:
(a) any corporate debt of the Licensee in issue at 17 September
1999 which had an investment grade credit rating at that date
maintains an investment grade credit rating throughout the
period during which such debt remains outstanding, and
(b) any corporate debt, other than corporate debt issued by way of
negotiated private placement, issued by the Licensee on or
after the 17 September 1999 has and maintains an investment
grade credit rating throughout the period during which such
debt remains outstanding.
2. For the purpose of paragraph 1:
(a) "corporate debt" means any unsecured and unsubordinated
borrowing of money having an initial maturity of five years or
more, and
(b) "investment grade credit rating" means:
a rating of not less than BBB- by Standard & Poor's
Ratings Group or any of its subsidiaries or not less
than Baa3 by Moody's Investors Service, Inc. or any
of its subsidiaries or such higher rating as shall be
specified by either of them from time to time as the
lowest investment grade credit rating, or
an equivalent rating from any other reputable credit
rating agency which has comparable standing in the UK
and the USA.
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Condition 75. Restriction on own generation capacity
- ----------------------------------------------------
1. The Licensee shall:
(a) procure that by 1 October 2000 the Existing Generation
Business shall be transferred to, and following such transfer
it shall be held by, an affiliate of the Licensee in which the
Licensee has no shareholding interest of any kind, whether
direct or indirect; and
(b) procure that with effect from 30 September 1999 any New
Generation Business is held by an affiliate of the Licensee in
which the Licensee has no shareholding interest of any kind,
whether direct or indirect.
2. Save with the prior written consent of the Director or in the
circumstances described in paragraph 3 below, the Licensee shall at all
times ensure that the sum of the amounts in megawatts (calculated as
provided under paragraphs 4 and 5 below) represented by the declared
net capacity of the Licensee's own-generation sets and the appropriate
share of the declared net capacity of generation sets in which the
Licensee has an accountable interest shall not exceed 400 megawatts.
3. Where the Licensee is in breach of paragraph 2 by reason of the
acquisition of own-generation sets or an accountable interest in other
generation sets in consequence of the occurrence of a specified event
affecting the operator or any third party, the Licensee shall forthwith
notify the Director for the purpose of obtaining such consent as is
specified in paragraph 2.
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4. For the purposes of calculating the limit under paragraph 2 and subject
to paragraph 5, there shall be attributed to the Licensee:
(a) the whole of the declared net capacity represented by
own-generation sets; and
(b) the appropriate share (namely the share representing the
Licensee's economic interest therein) of the declared net
capacity of generation sets in which it has an accountable
interest, ascertained in such manner as the Licensee with the
approval of the Director may determine.
5. Where the Director is satisfied that by virtue of the Licensee's
economic interest (ascertained in such manner as the Director may
determine) therein:
(a) generation sets in which the Licensee has only an accountable
interest should more properly be treated as own-generation
sets; or
(b) own-generation sets should more properly be treated as sets
in which the Licensee only has an accountable interest; or
(c) own-generation sets, or generation sets in which the Licensee
has an accountable interest, should not be treated as falling
in either category; or
(d) generation sets not declared as sets in which the Licensee has
an accountable interest, should be treated as generation sets
in which the Licensee has an accountable interest
the Director may issue directions to that effect.
6. For the purposes of this Condition and subject to paragraphs 5 and 9,
the Licensee shall have an accountable interest in a generation set in
circumstances where (such generation set not being an own-generation
set of the Licensee):
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(a) the operator is a related undertaking of the Licensee or any
affiliate of the Licensee; or
(b) the Licensee or any affiliate of the Licensee is in
partnership with or is party to any arrangement for sharing
profits or cost-savings or any joint venture with the operator
or with any third party with regard to the operator; or
(c) the Licensee or any affiliate of the Licensee both
(i) has (directly or indirectly):
(aa) any beneficial shareholding interest in the
operator; or
(bb) any beneficial underlying interest in the
generation set; or
(cc) provided or agreed to provide finance to the
operator otherwise than on arm's length
terms; or
(dd) provided or agreed to provide, or has
determined or is responsible for determining
the price (or other terms affecting the
financial value) of, the fuel used in the
generation sets
and
(ii) is entitled under a contract of not less than 5
years' duration:
(aa) to a share of the declared net capacity of
the generation set; or
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(bb) to a share of the declared net capacity of a
generation set being the own-generation set
of another Authorised Electricity Operator
or in which such Authorised Electricity
Operator has an accountable interest, under
arrangements for the exchange of capacity
entitlement or supplies of electricity
representing such entitlement between the
Licensee or its affiliate and such
Authorised Electricity Operator.
7. Paragraph 6 shall be applied in relation to the calculation of an
accountable interest in generation sets of any other Authorised
Electricity Operator as if the references therein to the Licensee were
replaced by references to such Authorised Electricity Operator.
8. References in paragraph 6 to contracts giving entitlements to a share
of declared net capacity shall include electricity sale or purchase
contracts where rights under such contract are exercisable by reference
to an identified generation set or to amounts generated at such set.
9. The Licensee shall not be deemed to have an accountable interest in a
generation set where:
(a) such generation set is owned and operated by the National Grid
Company plc or a wholly-owned subsidiary thereof under a
licence granted pursuant to Section 6 of the Act; or
(b) the Licensee's interest arises wholly under the terms of the
Pooling and Settlement Agreement or (other than as provided in
paragraph 8) under any electricity purchase or sale contract;
or
(c) the Licensee's interest arises solely by virtue of
arrangements for the sharing with the operator of any
generation set of the risks associated with changes in the
price of fuel used by the generation set during the term of
any such contract as is referred to in paragraph 6 or 8 above.
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10. The Licensee shall, on each such occasion as it provides to the
Director separate accounts for the Generation Business pursuant to
paragraph 3(b)(i) of Condition 71 and at any other time upon request of
the Director, provide to the Director a statement:
(a) confirming compliance with paragraphs 1, 2 and 3 above as a
the date of the statement and throughout the period since the
last such statement; and
(b) identifying (in such detail and with such supporting documents
or information as the Director may require) the amount of
capacity in megawatts represented by the declared net capacity
of own-generation sets attributable to the Licensee and the
appropriate share of the Licensee in the declared net capacity
of generation sets in which the Licensee has an accountable
interest, as at the date of the statement.
11. Where the Director is satisfied that the basis of calculation used by
the Licensee is not in conformity with paragraphs 4 and 5 above, the
Director may issue directions specifying an alternative basis of
calculation, and the basis of calculation by the Licensee shall be
adjusted accordingly with effect from the date of issue of the
directions or such other date as may be specified in the directions.
12. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"operator" means, in relation to any generation set, the
Authorised Electricity Operator or any person for
the time being responsible (under contract or
otherwise) for the generation or sale of
electricity from such plant.
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"own-generation set" means any generation set the majority beneficial
ownership of which is vested in the Licensee or an
affiliate of the Licensee or in respect of which the
Licensee or an affiliate of the Licensee is the
operator and references to own-generation sets of
another Authorised Electricity Operator shall be
construed as if the references herein to the Licensee
were replaced by references to that Authorised
Electricity Operator.
"specified event" means any such event as is described in paragraph
(1)(f) of Schedule 2 to this Licence but for this
purpose as if references to the Licensee were
replaced by references to the operator or third
party in question.
"underlying interest" in relation to any generation set means any
interest arising by reason of the Licensee or
affiliate or any related undertaking of the
Licensee or affiliate (whether alone or with
others):
(a) holding or being entitled to acquire an
interest in the land on which the generation
set, or any part thereof, is built;
(b) being in partnership with or party to
any arrangement for sharing of profits
or cost-savings or any joint venture
with any person holding or entitled to
acquire an interest in the land on which
the generation set, or any part thereof,
is built;
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(c) owning any electrical plant situated on or
operated as a unit with the generation set
(and for such purpose, any electrical plant
or equipment to the possession of which the
Licensee, affiliate or related undertaking is
entitled under any agreement for hire, hire
purchase, conditional sale or loan shall be
deemed to be owned by such person) provided
always that such electrical plant shall not
be deemed to be operated as a unit with any
generation set by reason only of connections
with any other system for the transmission or
distribution of electricity; or
(d) having obtained any consent under Section 36 of
the Act required for the construction or extension
of the generation set or any part thereof.
</TABLE>
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Condition 76. Restrictions relating to Embedded Generation
- ----------------------------------------------------------
1. The Licensee shall not, and shall procure that any affiliate or related
undertaking of the Licensee shall not, without the prior written
consent of the Director.
(a) construct or operate any embedded generation plant of the type
specified at paragraph 2; or
(b) own or acquire any such embedded generation plant or any
interest in the assets of any such embedded generation plant.
2. A generation set is "embedded generation plant" for the purposes of
paragraph 1 if it is a generation set which is connected to the
Licensee's Distribution System.
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Condition 77. Disposal of relevant assets
- -----------------------------------------
1. The Licensee shall not dispose of or relinquish operational control
over any relevant asset otherwise than in accordance with the following
paragraphs of this Condition.
2. Save as provided in paragraph 3, the Licensee shall give to the
Director not less than two months' prior written notice of its
intention to dispose of or relinquish operational control over any
relevant asset, together with such further information as the Director
may request relating to such asset or the circumstances of such
intended disposal or relinquishment of control or to the intentions in
regard thereto of the person proposing to acquire such asset or
operational control over such asset.
3. Notwithstanding paragraphs 1 and 2, the Licensee may dispose of or
relinquish operational control over any relevant asset:
(a) where:
(i) the Director has issued directions for the purposes
of this Condition containing a general consent
(whether or not subject to conditions) to:
(aa) transactions of a specified description; or
(bb) the disposal of or relinquishment of
operational control over relevant assets of
a specified description; and
(ii) the transaction or the relevant assets are of a
description to which such directions apply and the
disposal or relinquishment is in accordance with any
conditions to which the consent is subject;
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(b) where the disposal or relinquishment of operational control in
question is required by or under any enactment or subordinate
legislation.
4. Notwithstanding paragraph 1, the Licensee may dispose of or relinquish
operational control over any relevant asset as is specified in any
notice given under paragraph 2 in circumstances where:
(a) the Director confirms in writing that he consents to such
disposal or relinquishment (which consent may be made subject
to the acceptance by the Licensee or any third party in favour
of whom the relevant asset is proposed to be disposed or
operational control is proposed to be relinquished of such
conditions as the Director may specify); or
(b) the Director does not inform the Licensee in writing of any
objection to such disposal or relinquishment of control within
the notice period referred to in paragraph 2.
5. Without prejudice to paragraphs 1 to 4, the Licensee shall not after
17 September 1999 without the written consent of the Director after the
disclosure of all material facts;
(a) create any mortgage, charge, pledge, lien or other form of
security or encumbrance whatsoever, undertake any indebtedness
to any other person or enter into any guarantee or any
obligation otherwise than:
(i) on an arm's length basis;
(ii) on normal commercial terms;
(iii) for a Permitted Purpose; and
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(iv) (if the transaction is within the ambit of paragraph
1) in accordance with paragraphs 3 and 4;
(b) transfer, lease, license or lend any sum or sums, asset, right
or benefit to any affiliate or related undertaking of the
Licensee otherwise than by way of:
(i) a dividend or other distribution out of distributable
reserves;
(ii) repayment of capital;
(iii) payment properly due for any goods, services or
assets provided on an arm's length basis and on
normal commercial terms;
(iv) a transfer, lease, licence or loan of any asset,
right or benefit on an arm's length basis and on
normal commercial terms;
(v) repayment of or payment of interest on a loan not
prohibited by sub-paragraph (a);
(vi) payments for group corporation tax relief or for the
surrender of Advance Corporation Tax calculated on a
basis not exceeding the value of the benefit
received;
(vii) an acquisition of shares in conformity with paragraph
2 of Condition 72 made on an arm's length basis and
on normal commercial terms.
(c) enter into an agreement or incur a commitment incorporating a
cross-default obligation; or
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(d) continue or permit to remain in effect any agreement or
commitment incorporating a cross-default obligation subsisting
at 17 September 1999 save that the Licensee may permit any
cross-default obligation in existence at that date to remain
in effect for a period not exceeding twelve months from that
date, provided that the cross-default obligation is solely
referable to an instrument relating to the provision of a loan
or other financial facilities granted prior to that date and
the terms on which those facilities have been made available
as subsisting on that date are not varied or otherwise made
more onerous.
(e) the provisions of sub-paragraphs (c) and (d) of this paragraph
shall not prevent the Licensee from giving any guarantee
permitted by and compliant with the requirements of
sub-paragraph (a) of this paragraph.
6. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"cross-default obligation" means a term of any agreement or arrangement whereby
the Licensee's liability to pay or repay any debt or
other sum arises or is increased or accelerated or is
capable of arising, increasing or of acceleration by
reason of a default (howsoever such default may be
described or defined) by any person other than the
Licensee, unless:
(i) that liability can arise only as the result
of a default by a subsidiary of the Licensee,
and
(ii) the Licensee holds a majority of the voting
rights in that subsidiary and has the right
to appoint or remove a majority of its board
of directors, and
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(iii) that subsidiary carries on business only
for a purpose within sub-paragraphs (a)
or (c) of the definition of Permitted
Purpose.
"disposal" includes any sale, gift, lease, licence, loan,
mortgage, charge or the grant of any other
encumbrance or the permitting of any
encumbrance to subsist or any other
disposition to a third party, and "dispose"
shall be construed accordingly.
"indebtedness" means all liabilities now or hereafter due,
owing or incurred, whether actual or
contingent, whether solely or jointly with any
other person and whether as principal or
surety, together with any interest accruing
thereon and all costs, charges, penalties and
expenses incurred in connection therewith.
"relevant asset" means any asset for the time being forming
part of the Licensee's Distribution System, any
control centre for use in conjunction therewith
and any legal or beneficial interest in land
upon which any of the foregoing is situate.
</TABLE>
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Condition 78. Provision of information to the Director
- ------------------------------------------------------
1. Subject to paragraphs 6 and 7, the Licensee shall furnish to the
Director, in such manner and at such times as the Director may require,
such information and shall procure and furnish to him such reports, as
the Director may consider necessary in the light of the Conditions or
as he may require for the purpose of performing:
(a) the functions assigned to him by or under the Act; and
(b) any functions transferred to him under the Act.
2. The Licensee shall procure from each company or other person which is
at any time an ultimate holding company of the Licensee a legally
enforceable undertaking in favour of the Licensee in the form
specified by the Director that that ultimate holding company ("the
Covenantor") will give to the Licensee, and will procure that each
subsidiary of the Covenantor (other than the Licensee and its
subsidiaries) will give to the Licensee, all such information as may
be necessary to enable the Licensee to comply fully with the
obligation imposed on it in paragraph 1. Such undertaking shall be
obtained within 7 days of the company or the other person in question
becoming an ultimate holding company of the Licensee and shall remain
in force for so long as the Licensee remains the holder of this
Licence and the Covenantor remains an ultimate holding company of the
Licensee.
3. The Licensee shall deliver to the Director evidence (including a copy
of each such undertaking) that the Licensee has complied with the
obligation to procure undertakings pursuant to paragraph 2.
4. The Licensee shall not, save with the consent in writing of the
Director, enter (directly or indirectly) into any agreement or
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arrangement with any ultimate holding company of the Licensee or any of
the subsidiaries of such ultimate holding company (other than the
subsidiaries of the Licensee) at a time when:
(i) an undertaking complying with paragraph 2 is not in
place in relation to that ultimate holding company:
or
(ii) there is an unremedied breach of such undertaking.
5. Without prejudice to the generality of paragraph 1, the Director may
call for the furnishing of accounting information which is more
extensive than or differs from that required to be prepared and
supplied to the Director under Condition 71.
6. The Licensee may not be required by the Director to furnish him under
this Condition with information for the purpose of the exercise of his
functions under Section 48 of the Act.
7. The Licensee may not be required by the Director to furnish him under
this Condition with any information in relation to an enforcement
matter which the Licensee could not be compelled to produce or give
under Section 28(3) of the Act.
8. The power of the Director to call for information under paragraph 1 is
in addition to the power of the Director to call for information under
or pursuant to any other Condition.
9. The Licensee shall, if so requested by the Director, give reasoned
comments on the accuracy and text of any information and advice (so far
as relating to the Supply and Distribution Businesses) which the
Director proposes to publish pursuant to Section 48 of the Act.
10. In this Condition "information" shall include any documents, accounts,
estimates, returns or reports (whether or not prepared specifically at
the request of the Director) of any description specified by the
Director.
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Condition 79. Payment of fees
- -----------------------------
1. The Licensee shall, at the times stated hereunder, pay to the Secretary
of State fees of the amount specified in, or determined under, this
Condition.
2. In respect of the year beginning on 1 April 1991 and in each subsequent
year, the Licensee shall pay to the Secretary of State a fee which is
the aggregate of the following amounts:
(a) an amount which is a proportion as determined by the Director
of the amount estimated by the Director, according to a method
which has previously been disclosed in writing to the
Licensee, as likely to be his total costs during the coming
year;
(b) the amount (or, where the Relevant Consumers' Committee in
question is the consumers' committee for more than one public
electricity supplier, the amount which is a proportion as
determined by the Director, according to a method which has
previously been disclosed in writing to the Licensee, of such
amount) estimated by the Director (having regard to any
statement under paragraph 8(2) of Schedule 2 to the Act) as
being likely to be the costs during the coming year of the
Relevant Consumers' Committee in the exercise of the functions
assigned to it by or under the Act and any other such
functions as it has been or may be required to exercise by the
Director;
(c) an amount which is a proportion as determined by the Director
of the amount estimated by the Director (in consultation with
the Competition Commission) as having been incurred in the
calendar year immediately preceding the 1st April in question
by the Competition Commission in connection with references
made to it under section 12 of the Act with respect to this
Licence or any other licence issued under section 6(1)(c) of
the Act; and
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(d) the difference (being a positive or a negative amount), if
any, between:
(i) the amount of the fee paid by the Licensee in respect
of the year immediately preceding the 1st April in
question; and
(ii) the amount which that fee would have been in respect
of that year had the amounts comprised therein been
calculated by reference to:
(aa) in the case of sub-paragraph 2(a), the
actual total costs of the Director during
that year and the proportion thereof
attributable to the Licensee; and
(bb) in the case of sub-paragraph 2(b), the
actual total costs of the Relevant
Consumers' Committee during that year and
where appropriate, the proportion thereof
attributable to the Licensee,
(such costs being apportioned in each case as
determined by the Director according to a method
previously disclosed in writing to the Licensee),
and the fee shall be paid by the Licensee to the Secretary of State
within one month of the Director giving notice to the Licensee of its
amount if that notice is given within 6 months of the beginning of the
year in respect of which the fee is payable.
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Condition 80. Arrangements for provision of services by the Agent
- ------------------------------------------------------------------
1. This Condition shall continue in force until:
(a) the arrangements contemplated by the Memorandum of
Understanding are terminated or cease to have effect; and
(b) the Director directs in writing that, from such date and
subject to such terms and conditions as he may specify in his
direction, this Condition shall no longer be in force.
2. For the avoidance of doubt, where the Agent has fully complied with any
obligation placed upon the Licensee under or by virtue of any Relevant
Provision, its compliance shall be regarded for the purposes of this
Licence as compliance by the Licensee and nothing in this Licence shall
require the Licensee to take any further steps to comply with that
obligation.
3. The exercise by the Agent of any Relevant Power shall, insofar as the
Agent can lawfully exercise that power, be deemed to be made with the
necessary authorisation of the Licensee and shall be treated by the
Director, for the purposes of this Licence and of the Act, as the
exercise of such Power by the Licensee.
4. The service on the Director by the Agent of any application, consent,
representation, notice, request or other communication given in
accordance with or by virtue of any of the Relevant Provisions shall be
treated as the service of such document on the Director by the
Licensee.
313
<PAGE>
5. The service by the Director on the Agent of any direction, consent,
determination, derogation, consultation or other communication given in
accordance with or by virtue of any of the Relevant Provisions shall be
treated as the service of such document by the Director on the
Licensee.
6. In this Condition:
<TABLE>
<CAPTION>
<S> <C>
"Agent" means London Energy Company Ltd. registered in
England & Wales under company number 2228297.
"Memorandum of means the document dated 30 September 1999 and
Understanding" setting out the basis of arrangements for the
operation and management of the Supply Business
by the Agent.
"Relevant Power" means a power, right or capacity granted to the
Licensee, for the purpose of performing its
authorised activities, under or by virtue of
any Relevant Provision.
"Relevant Provision" means the Conditions of Section B of this Licence
and such provisions of the Act as, in the reasonable
opinion of the Director, apply to the Supply Business.
</TABLE>
314
<PAGE>
Schedule 1. Description of authorised area
- ------------------------------------------
The authorised area shall comprise that area which is outlined on the attached
map and shall additionally include those premises listed in List A (the
"Additional Premises") but shall not include those premises listed in List B
(the "Excluded Premises").
A: ADDITIONAL PREMISES
B: EXCLUDED PREMISES
315
<PAGE>
Schedule 2. Terms as to revocation
- ----------------------------------
1. The Secretary of State may at any time revoke this Licence by not less
than 30 days' notice in writing to the Licensee:
(a) if the Licensee agrees in writing with the Secretary of State
that this Licence should be revoked;
(b) if any amount payable under Condition 79 is unpaid 30 days
after it has become due and remains unpaid for a period of 14
days after the Secretary of State has given the Licensee
notice that the payment is overdue. Provided that no such
notice shall be given earlier than the sixteenth day after the
day on which the amount payable became due;
(c) if the Licensee fails to comply with a final order (within the
meaning of Section 25 of the Act) or with a provisional order
(within the meaning of that section) which has been confirmed
under that section and (in either case) such failure is not
rectified to the satisfaction of the Secretary of State within
three months after the Secretary of State has given notice of
such failure to the Licensee. Provided that no such notice
shall be given by the Secretary of State before the expiration
of the period within which an application under Section 27 of
the Act could be made questioning the validity of the final or
provisional order or before the proceedings relating to any
such application are finally determined;
(d) if the Licensee fails to comply with any order made by the
Secretary of State under Section 56, 73, 74 or 89 of the Fair
Trading Act 1973 or under Section 10(2)(a) of the Competition
Act 1980;
(e) if the Licensee ceases to carry on its business as a public
electricity supplier:
316
<PAGE>
(f) if the Licensee:
(i) is unable to pay its debts (within the meaning of
Section 123(1) or (2) of the Insolvency Act 1986, but
subject to paragraph 2 of this Schedule) or any
voluntary arrangement is proposed in relation to it
under Section 1 of that Act or if it enters into any
scheme of arrangement (other than for the purpose of
reconstruction or amalgamation upon terms and within
such period as may previously have been approved in
writing by the Secretary of State);
(ii) has a receiver (which expression shall include an
administrative receiver within the meaning of Section
29 of the Insolvency Act 1986) of the whole or any
material part of its assets or undertaking appointed;
(iii) has an administration order under Section 8 of the
Insolvency Act 1986 made in relation to it;
(iv) passes any resolution for winding-up other than a
resolution previously approved in writing by the
Secretary of State; or
(v) becomes subject to an order by the High Court for
winding-up; or
(g) if the Licensee is convicted of having committed an offence
under Section 59 of the Act in making its application for this
Licence.
2. For the purposes of paragraph 1(f)(i) of this Schedule Section
123(1)(a) of the Insolvency Act 1986 shall have effect as if for
"(pound)750" there was substituted "(pound)250,000" or such higher
figure as the Director may from time to time determine by notice in
writing to the Secretary of State and the Licensee.
317
<PAGE>
3. The Licensee shall not be deemed to be unable to pay its debts for the
purposes of paragraph 1(f)(i) of this Schedule if any such demand as is
mentioned in Section 123(1)(a) of the Insolvency Act 1986 is being
contested in good faith by the Licensee with recourse to all
appropriate measures and procedures or if any such demand is satisfied
before the expiration of such period as may be stated in any notice
given by the Secretary of State under paragraph 1 of the Schedule.
4. The provisions of Section 109 of the Act shall apply for the purposes
of the service of any notice under this Schedule.
318
<PAGE>
Schedule 3A. Supplementary provisions of the distribution charge restriction
- ----------------------------------------------------------------------------
conditions
- ----------
Part A. Principles for Attribution
- ----------------------------------
General Principles
- ------------------
A1. Where for the purposes of the distribution charge restriction
conditions, a share of costs borne by the Licensee requires to be
attributed to any part of the market, the Licensee shall make that
attribution on a basis which ensures that no more than a fair
proportion of those costs, reflecting the costs incurred by the
Licensee in supplying that part of the market, are so attributed.
A2. The following paragraphs of this Part of Schedule 3A are without
prejudice to paragraph A1.
Transmission connection point charges and remote transmission asset rentals
- ---------------------------------------------------------------------------
A3. The transmission connection point charges and remote transmission asset
rentals requiring to be attributed between the regulated quantity
distributed and other quantities distributed shall be attributed in
proportion to the transmission connection point and remote transmission
asset capacity required for the purpose of distributing those
quantities.
319
<PAGE>
Distribution losses
A4. Where an amount (in units) in respect of distribution losses requires
to be calculated and attributed in respect of EHV units and units
distributed by the Licensee for the purpose of supply to premises
outside the licensee's authorised area, such calculation and
attribution shall be made consistently with the principles underlying
the schedule of adjustment factors referred to at sub-paragraph (b) of
paragraph 3 of Condition 5.
Information to be provided by Licensee
- --------------------------------------
A5. The Licensee shall following the end of each relevant year furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3C, a statement that
the attribution of the transmission connection point charges, the
remote transmission asset rentals and distribution losses was made in
accordance with the provisions of this Part of Schedule 3, accompanied
(where appropriate) by:
(a) a statement of the total amounts attributed to regulated
Designated Customers and other customers; and
(b) copies of statements prepared under paragraph 2 of Condition
3C and an explanation of the basis therefor.
A6. Where the Director is satisfied that the basis of calculation or
attribution (as the case may be) used by the Licensee is not in
conformity with paragraph A1, the Director may issue directions
specifying an alternative basis of calculation or attribution, and the
basis of calculation or attribution by the Licensee (as the case may
be) shall be adjusted accordingly with effect from the date of issue of
the directions or (subject to paragraph 10 of Condition 3C) such other
date as may be specified in those directions.
320
<PAGE>
Part B. EHV premises
- --------------------
B1. EHV premises shall comprise:
(a) in relation to premises connected to the Licensee's
Distribution System as at the date this licence enters into
force, those premises specified in the list of EHV premises
notified in writing to the Director by the Licensee within
twenty-eight days after this licence enters into force; and
(b) in relation to premises connected to the Licensee's
Distribution System which are either first connected or
(having been previously connected) have had their connections
materially altered following the date this licence enters into
force, means premises connected to the Licensee's Distribution
System at a voltage at or higher than 22 kilovolts or at a
sub-station with a primary voltage of 66 kilovolts or above.
B2. The Licensee shall following the end of each relevant year furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3C, a statement
listing any changes in the premises falling to be treated as EHV
premises.
B3. Where the Director is satisfied that any premises treated by the
Licensee as EHV premises should not in conformity with sub-paragraph
B1(b) above be so treated, the Director may issue directions to that
effect, and such premises shall cease to be treated as EHV premises
from the date of issue of the directions or (subject to paragraph 11 of
Condition 3C) such other date as may be specified in those directions.
321
<PAGE>
Part C. Excluded services
- -------------------------
C1. There may be treated as excluded services provided by the Licensee in
its Distribution Business such services in respect of which charges are
made which:
(a) do not fall within paragraph C2 of this Part; and
(b) may (subject to paragraph C8) be determined by the Licensee as
falling under one of the principles set out in paragraphs C3
to C6 of this Part.
C2. No service provided by the Licensee as part of its Distribution
Business shall be treated as an excluded service in so far as it
consists of the provision of services remunerated under the use of
system charges in accordance with paragraph 3 of Condition 5 including
(without prejudice to the foregoing):
(i) (subject to paragraph C3 of this Part) the transport
of electricity;
(ii) the carrying out of works for the installation of
electric lines or electrical plant (not otherwise
payable in the form of connection charges);
(iii) the carrying out of works or the provision of
maintenance or repair or other services for the
purpose of enabling the Licensee to comply with
Condition 6, 11 and 16, the Electricity Supply
Regulations 1988 or any regulations made under
Section 29 of the Act or any other enactment relating
to safety or standards applicable in respect of the
Distribution Business; and
322
<PAGE>
(iv) (subject to paragraph C5 of this Part) the provision,
installation and maintenance of any meters,
switchgear or other electrical plant (not being part
of connection charges).
C3. The Licensee may treat as being an excluded service for the purposes
of its Distribution Business the transport of:
(a) units of electricity not consumed in the licensee's authorised
area; or
(b) EHV units.
C4. Charges of the type described in paragraph 3 of Condition 5 and borne
in accordance with the principles set out in paragraph 7 of Condition 5
by any person as connection charges, and charges in respect of the
statements referred to in paragraph 10 of Condition 5, may each be
treated as excluded services for the purposes of the Distribution
Business.
C5. A service provided by the Licensee as part of its Distribution Business
may be treated as an excluded service in so far as it consists in the
provision of services (including metering, electric lines or electrical
plant) for the specific benefit of any third party requesting the same
and not made available by the Licensee as a normal part of its
Distribution Business remunerated by use of system charges including
(without prejudice to the foregoing):
(i) special metering (including "time of day" metering)
to facilitate energy saving programmes for the
benefit of customers requesting the same;
323
<PAGE>
(ii) charges for moving mains, services or meters forming
part of the Licensee's Distribution System to
accommodate extension, re-design or re-development of
any premises on which the same are located or to
which they are connected;
(iii) the provision of electric lines and electrical plant
(a) insofar as the same are required for the specific
purpose of enabling the provision of top-up or
standby supplies or sales of electricity or (b) to
provide a higher degree of security than is required
for the purposes of complying with Condition 6;
(iv) the amount by which charges for the provision of
prepayment meters to customers exceed charges for the
provision of standard meters for such customers; and
(v) special metering or telemetry or data processing
equipment for the purposes of enabling any person
which is a party to the Pooling and Settlement
Agreement to comply with its obligations in respect
of metering thereunder, or for the performance by the
Licensee of any service in relation thereto.
C6. There may be treated as an excluded service for the purposes of the
Distribution Business, charges for the relocation of electric lines or
electrical plant and the carrying out of works associated therewith
pursuant to a statutory obligation (other than under Section 9(1) or
Section 16 of the Act) imposed on the Licensee.
324
<PAGE>
Information to be provided to the Director
- ------------------------------------------
C7. The Licensee shall following the end of each relevant year furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3C, details
specifying separately the nature of all services provided as part of
its Distribution Business by the Licensee and treated as excluded
services by the Licensee during the course of such year and stating the
revenues derived by the Licensee in respect of each such service so
treated.
Directions
- ----------
C8. Where the Director is satisfied that in light of the principles set out
in paragraphs C2 to C7 inclusive any service treated by the Licensee as
an excluded service should not be so treated, the Director shall issue
directions to that effect, and the service or services specified in the
directions shall cease to be treated as excluded services from the date
of issue of the directions or (subject to paragraph 10 of Condition 3C)
such other date as may be specified in the directions.
325
<PAGE>
Part D. Regulated distribution unit categories
- ----------------------------------------------
D1. The Licensee shall following the end of each relevant year furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3C, details
specifying separately those use of system charges in respect of which
the Licensee has during the course of such year treated the units
distributed as falling within the definition of each of LV1 units and
LV2 units and LV3 units respectively.
D2. The definition of LV1 units includes units distributed under the
following tariffs:
<TABLE>
<CAPTION>
<S> <C>
E7DT/90 Economy Seven Tariff (day units)
WMT/LA/90 Domestic Day/Night (Limited Application)-
The White Meter Tariff (day units)
E7BT/90 Economy 7 Block Tariff (day units)
E7DNT/90 Economy 7 Day and Night Tariff (all non-night units)
E7FT/90 Economy 7 Farm Tariff (day units) FDNT/90 Farm
Day/Night (Limited Application) Tariff
(day units)
D3. The definition of LV2 units includes units distributed under the
following tariffs:
E7DT/90 Economy 7 Tariff, (night units)
WMT/LA/90 Domestic Day/Night-The White Meter Tariff
(night units)
OP7T/LA/90 The Off Peak (7hr) (Limited Application) Tariff
OPT/N/LA/90 Off-peak night only (Limited Application) Tariff
OPT/LA/90 Off-peak (Limited Application) Tariff
E7BT/90 Economy 7 Block tariff (night units)
E7DNT/90 Economy 7 Day and Night tariff (night units)
E7DNT/90 Economy 7 Farm Tariff
(night units)
FDNT/90 Farm Day/Night (Limited Application) Tariff
(night units)
Tariff Codes 201-214 Assorted Non-standard off-peak tariffs,
D4. The definition of LV3 units includes units distributed under the
following tariffs:
DT/90 Domestic Tariff
BT/90 Block Tariff
FRT/LA/90 Flat Rate (limited application) tariff.
FT/90 Farm Tariff
AFT/LA/90 Alternative Farm (limited application) tariff.
NT/90 Day and Night (limited application) tariff
MSTA/90 Supply Tariff A (Scales B and C)
MNT/LA/90 Demand Day/Night (limited application) tariff
(scales B and C)
Public lighting terms
LV STOD Terms
All other LV tariffs and variants of tariffs not included in LV (1)
or LV (2)
</TABLE>
D5. Notwithstanding the provisions of paragraphs D2 to D4 above, where the
Director is satisfied that a tariff or tariffs in respect of which the
Licensee has treated the units distributed as falling within one of the
categories in paragraphs D2 to D4 above should not be so treated, the
Director shall issue directions to that effect and the tariff or
tariffs specified in the directions shall cease to be so treated from
the date of issue of the directions or (subject to paragraph 10 of
Condition 3C) such other date as may be specified in the directions and
shall with effect from such date be treated in such manner as may be
specified in the directions.
326
<PAGE>
Part E. Calculation of factor in respect of distribution losses
- ---------------------------------------------------------------
E1. For the purposes of calculation of the terms ALt and Lt as used in
paragraph 3 of Condition 3A shall each be determined for relevant years
commencing on or after the1st April 1995 using the consistent
methodological basis set out in paragraphs E2 to E5 below.
Consistent methodological basis for determination of ALt and Lt
- ---------------------------------------------------------------
E2. Adjusted distribution losses shall be determined as being the
difference between adjusted grid supply point purchases and adjusted
units distributed.
E3. Units metered on entry to the Licensee's Distribution System shall be
adjusted to obtain adjusted grid supply point purchases by:
(a) excluding that number of units which is equal to the sum of:
(i) EHV units; and
(ii) units distributed by the Licensee for the purpose of
supply to premises outside the licensee's authorised
area; and
(iii) an amount in respect of distribution losses between
the grid supply point and the exit point attributable
to the units referred to in (i) and (ii) above, as
determined in accordance with paragraph A4 in Part A
of Schedule 3A; and
327
<PAGE>
(b) including an amount (in units) to represent the effect of
units entering the Licensee's Distribution System otherwise
than at grid supply points, being the difference between the
number of units so entering and the number of units that would
have been required to have entered at grid supply points in
their absence (such latter number of units being calculated
consistently with the principles underlying the schedule of
adjustment factors in respect of distribution losses referred
to at sub-paragraph (b) of paragraph 3 of Condition 5).
E4. For so long as units are metered on entry to the Licensee's
Distribution System at bulk supply points instead of at grid supply
points, such units shall be calculated by:
(a) applying the procedures in paragraph E3 as if all references
to units metered at grid supply points were to units metered
at bulk supply points; and
(b) grossing-up units metered at the bulk supply points by the
relevant grid supply point conversion factor being either:
(i) 0.5 per cent of the units metered at the bulk supply
points; or
(ii) such other factor to take account of losses occurring
between the grid supply points and the bulk supply
points as the Licensee may with the prior approval of
the Director determine to be appropriate.
328
<PAGE>
E5. Adjusted units distributed shall be obtained by:
(a) calculating all units distributed by the Licensee metered at
exit points on leaving the Licensee's Distribution System;
(b) deducting therefrom EHV units and units distributed for the
purpose of supply to premises outside the licensee's
authorised area; and
(c) adding thereto an amount equal to the units consumed on the
licensee's premises in the authorised area (insofar as not
otherwise taken into account in determining units distributed
under sub-paragraph (a) above).
Initial relevant loss percentage in the term Alt
E6. In the first relevant year, the initial relevant loss percentage in the
term ALt shall (consistently with the methodology set out in paragraphs
E2 to E5 above) be determined as being:
adjusted GSP purchase units less adjusted units distributed
-----------------------------------------------------------
adjusted units distributed
where adjusted GSP purchase units are calculated as provided in
paragraph E7 and adjusted units distributed are calculated as provided
in paragraph E8.
E7. Adjusted GSP purchase units shall be calculated in accordance with the
procedures successively described in the following sub-paragraphs:
(a) the actual losses in each of relevant years t-1, t-2 and t-3
(the "historic losses") shall be calculated as the difference
in each of those years between units purchased at entry points
to the Licensee's Distribution System and units sold;
(b) the historic loss percentage shall be calculated as the
proportion (expressed as a percentage) which the aggregate
historic losses were of the aggregate units purchased at entry
points to the Licensee's Distribution System, in each case
over the three relevant years t-1 to t-3;
(c) the total number of units sold in relevant year t-1 shall be
grossed up by the historic loss percentage ("BSP purchase
units"); and
(d) the figure for BSP purchase units resulting from sub-paragraph
(c) shall be adjusted to obtain adjusted GSP purchase units in
accordance with the provisions of paragraphs E3 and E4 above.
E8. Adjusted units distributed shall be calculated by applying the
methodology of paragraph E5 in respect of those units referred to in
sub-paragraphs (a) to (c) of paragraph E5 in relevant year t-1.
Information to be provided to the Director
- ------------------------------------------
E9. The Licensee shall within three months after the entry into force of
this licence furnish to the Director a statement showing the initial
relevant loss percentage and the underlying calculations.
E10. The Licensee shall, following the end of each relevant year, furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 7 of Condition 3C, a statement
showing adjusted distribution losses for that relevant year,
accompanied by the underlying calculations and (where appropriate) an
explanation of any changes in the basis of calculation or estimation
thereof.
E11. Where the Director is satisfied that any statement or underlying
calculation provided has not been drawn up in conformity with
paragraphs E2 to E8 above, the Director may issue directions, and the
statement or underlying calculation shall be adjusted with effect from
the date of issue of the directions or (subject to paragraph 10 of
Condition 3C) such other date as may be specified in the directions.
329
<PAGE>
Schedule 3B. Supplementary provisions of the supply charge restriction
- ----------------------------------------------------------------------
conditions
- ----------
Part A. Principles for Attribution
- ----------------------------------
General Principles
- ------------------
A1. Where for the purposes of the supply charge restriction conditions, a
share of costs borne by the Licensee requires to be attributed to any
part of the market, the Licensee shall make that attribution on a basis
which ensures that no more than a fair proportion of those costs,
reflecting the costs incurred by the Licensee in supplying that part of
the market, are so attributed.
A2. The following paragraphs of this Part of Schedule 3B are without
prejudice to paragraph A1.
Fossil Fuel Levy and payments in lieu thereof
- ---------------------------------------------
A3. The fossil fuel levy requiring to be attributed to supplies to
Designated Customers shall be attributed on the basis of the amount of
the levy incorporated in the prices actually charged or to be charged
by the Licensee on supplies to such customers in the relevant year in
respect of which the attribution falls to be made. Amounts in lieu of
the fossil fuel levy in respect of purchases of electricity other than
leviable electricity requiring to be calculated and then attributed to
supplies to Designated Customers in any relevant year for the purposes
of Condition 29A shall:
330
<PAGE>
(a) be calculated as being such amounts as correspond to the
lesser of:
(i) the premium actually payable (measured on an accruals
basis) by the Licensee during the relevant year on
purchases of electricity other than leviable
electricity as representing the benefit to the
Licensee of being able to treat such electricity as
being other than leviable electricity for the
purposes of Section 33 of the Act and Regulations
thereunder; and
(ii) the additional amount that would have been payable
(measured on an accruals basis) by the Licensee in
respect of the fossil fuel levy pursuant to
Regulations made under Section 33 of the Act had such
electricity been leviable electricity; and
(b) be attributed to supplies to Designated Customers pro rata to
the amount which the quantity supplied to Designated Customers
bears to the total quantity supplied (in each case in the
relevant year in respect of which the attribution falls to be
made) or on the basis of the amount referred to in paragraph
(a) incorporated in the prices actually charged or to be
charged by the Licensee on supplies to such customers in the
relevant year in respect of which the attribution falls to be
made or on such other basis of attribution as the Licensee
shall previously have agreed with the Director.
Information to be provided by Licensee
- --------------------------------------
A4. The Licensee shall following the end of each relevant year furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 3 of Condition 29C, a statement of
the actual attribution of electricity purchase costs between regulated
and other customers and reconciling the attribution with any statements
made in respect of the relevant year under paragraph 1 of Condition
29C, and a statement confirming that the calculation of amounts in lieu
of the fossil fuel levy and the attribution of the fossil fuel levy and
amounts in lieu thereof was made in accordance with the provisions of
this Part of Schedule 3B, accompanied (where appropriate) by:
331
<PAGE>
(a) a statement of the total amounts attributed to regulated
Designated Customers and other customers; and
(b) copies of statements prepared under paragraph 1 of Condition
29C and an explanation of the basis therefor.
A5. Where the Director is satisfied that the basis of calculation or
attribution (as the case may be) used by the Licensee is not in
conformity with paragraph A1, the Director may issue directions
specifying an alternative basis of calculation or attribution, and the
basis of calculation or attribution by the Licensee (as the case may
be) shall be adjusted accordingly with effect from the date of issue of
the directions or (subject to paragraph 6 of Condition 29C) such other
date as may be specified in those directions.
332
<PAGE>
Part B. Excluded services
- -------------------------
B1. Subject to paragraph B3, a service provided by the Licensee as part of
its Supply Business may be treated as an excluded service in so far as
it consists of the provision of services for the specific benefit of
customers requesting the same and not made available by the Licensee as
a normal part of such Business. For the avoidance of doubt, the
provision of facilities for prepayment may not be treated as an
excluded service except the provision of prepayment meters as an
excluded service by the Distribution Business.
Information to be provided to the Director
- -----------------------------------------
B2. The Licensee shall following the end of each relevant year furnish to
the Director, as being one of the specified items to be included in the
statement referred to at paragraph 3 of Condition 29C, details
specifying separately the nature of all services provided as part of
its or Supply Business by the Licensee and treated as excluded services
by the Licensee during the course of such year and stating the revenues
derived by the Licensee in respect of each such service so treated.
Directions
- ----------
B3. Where the Director is satisfied that in light of the principles set out
in paragraph B1 any service treated by the Licensee as an excluded
service should not be so treated, the Director shall issue directions
to that effect, and the service or services specified in the directions
shall cease to be treated as excluded services from the date of issue
of the directions or (subject to paragraph 6 of Condition 29C) such
other date as may be specified in the directions.
333
<PAGE>
EXHIBIT 15
ARTHUR ANDERSEN
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Southern Investments UK plc
We have reviewed the accompanying condensed consolidated balance sheet of
SOUTHERN INVESTMENTS UK plc (a company incorporated in England and Wales) as of
September 30, 1999, and the related condensed consolidated statements of income
for the three-month and six-month periods ended September 30, 1999 and 1998, and
the condensed consolidated statements of cash flows for the six-month periods
ended September 30, 1999 and 1998. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles in the United States.
We have previously audited, in accordance with generally accepted auditing
standards in the United States, the consolidated balance sheet of SOUTHERN
INVESTMENTS UK plc as of March 31, 1999, and, in our report dated June 23, 1999,
we expressed an unqualified opinion on that consolidated balance sheet. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of March 31, 1999, is fairly stated, in all material respects,
in relation to the consolidated balance sheet from which it has been derived.
/s/ARTHUR ANDERSEN
ARTHUR ANDERSEN
Bristol, England
November 10, 1999
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from Southern
Investments UK plc Form 10-Q for the six months ended September 30, 1999, and is
qualified in its entirety by reference to such financial statements. Values are
in (pound) sterling.
</LEGEND>
<MULTIPLIER> 1,000,000
<CURRENCY> Pounds Sterling
<S> <C>
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50
0
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0
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0
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</TABLE>
