YORKSHIRE POWER GROUP LTD, 10-Q, 2000-05-15

YORKSHIRE POWER GROUP LTD
10-Q, 2000-05-15
ELECTRIC SERVICES

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<PAGE>
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 Quarterly Period Ended MARCH 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For The Transition Period from to

Registrant; State or Other
Commission Jurisdiction of Incorporation; I.R.S Employer
File Number Address; and Telephone Number Identification No.

333-47925 Yorkshire Power Group Limited 84-1393785
(England & Wales)
Wetherby Road
Scarcroft
Leeds LS14 3HS
United Kingdom
011-44-113-289-2123

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

A description of the registrant's common stock follows:

Description of Shares Outstanding
Registrant Common Stock at April 30, 2000

Yorkshire Power Par Value (POUNDS)1 Per Share
440,000,002
Group Limited

<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARY COMPANIES
<TABLE>
Form 10-Q
<CAPTION>
For The Quarter Ended March 31, 2000

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION Page
<S> <C>
Consolidated Statements of Income 5
Consolidated Balance Sheets 6
Consolidated Statements of Cash Flows 8
Consolidated Statements of Changes in Shareholders' Equity 10
Notes to Consolidated Financial Statements 11
Management's Discussion and Analysis of Results of
Operations and Financial Condition 22

PART II. OTHER INFORMATION

Item 5 Other Information 28
Item 6 Exhibits and Reports on Form 8-K 30

SIGNATURES 31
</TABLE>
<PAGE>
Forward Looking Statements

Certain statements in this Form 10-Q under the captions
"Management's Discussion and Analysis of Results of Operations and
Financial Condition", "Other Information" and elsewhere may
constitute forward looking statements. Such forward looking
statements involve known and unknown risks, uncertainties and
other important factors that could cause the actual results,
performance or achievements of the Yorkshire Group or any of its
subsidiaries or industry results, to differ materially from any
future results, performance or achievements expressed or implied
by such forward looking statements. Such risks, uncertainties and
other important factors include, among others: general economic
and business conditions in the UK, the Authorized Area and
elsewhere; currency fluctuations; governmental, statutory,
regulatory or administrative initiatives affecting Yorkshire
Group, Yorkshire or the UK electric and gas utilities industries;
general industry trends; competition; the cost and availability of
electricity, gas and other alternative energy sources; changes in
commodity prices, interest rates and hedging costs; changes in
business strategy, development plans or vendor relationships;
availability, terms and deployment of capital; availability of
qualified personnel; increased rates of taxes or other changes in
tax law; changes in, or the failure or inability to comply with,
governmental regulation, including, without limitation,
environmental regulations; the potential introduction of the Euro;
and other factors referenced in this Form 10-Q. These forward
looking statements speak only as of the date of this Form 10-Q.
<PAGE>
SELECTED DEFINITIONS

When used in this report, the following terms will have the
meaning indicated.

AEP means American Electric Power Company, Inc.

Authorized Area means Yorkshires service area as determined
by its PES license

British Energy means British Energy plc

CFD means contract for differences

CSW means Central and South West Corporation

EdF means Electricite de France

ESPS means Electricity Supply Pension Scheme

Fiscal Year means a year ended March 31

Form 10-K means the Annual Report on Form 10-K of Yorkshire
Group for the Transition Period

Ionica means Ionica Group plc

London Electricity means London Electricity plc

National Power means National Power plc

NETA means New Electricity Trading Arrangements

NGC means the National Grid Company plc, which is wholly owned
by NGG

NGG means the National Grid Group plc

Ofgem means Office of Gas and Electricity Markets

PES means public electricity supplier

Pool means the wholesale trading market for electricity in
England and Wales

REC means one of the 12 regional electricity companies in
England and Wales licensed to distribute and supply electricity

Supply means the supply of electricity and gas

Transition Period means the nine-month period beginning April
1, 1999 and ending December 31, 1999

UK means the United Kingdom

US means the United States of America

Yorkshire means Yorkshire Electricity Group plc and its
subsidiaries

Yorkshire Group means Yorkshire Power Group Limited and its
subsidiaries
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in millions)
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
(POUNDS) $ (POUNDS)
<S> <C> <C> <C>
OPERATING REVENUES . . . . . . . . . . . . 423 675 394

COST OF SALES. . . . . . . . . . . . . . . 294 469 274

GROSS MARGIN . . . . . . . . . . . . . . . 129 206 120

OPERATING EXPENSES:
Maintenance. . . . . . . . . . . . . . . 14 22 15
Depreciation and Amortization. . . . . . 19 31 20
Selling, General and Administrative. . . 37 59 36
INCOME FROM OPERATIONS . . . . . . . . . . 59 94 49

OTHER INCOME (EXPENSE), NET: . . . . . . . - - (4)

INTEREST EXPENSE:. . . . . . . . . . . . . (29) (46) (28)

INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES. . . . . . . . . . . 30 48 17

PROVISION FOR INCOME TAXES . . . . . . . . 10 16 7

INCOME FROM CONTINUING OPERATIONS
BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE. . . . . . . . . . 20 32 10

CUMULATIVE EFFECT ON PRIOR YEARS (TO
DECEMBER 31, 1999) OF CHANGING TO A
DIFFERENT DEPRECIATION METHOD (NOTE 7) . . 8 13 -

NET INCOME . . . . . . . . . . . . . . . . 28 45 10

PROFORMA AMOUNTS ASSUMING THE
NEW DEPRECIATION METHOD IS
APPLIED RETROACTIVELY

NET INCOME . . . . . . . . . . . . . . . . 20 32 11

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
(UNAUDITED)
<CAPTION>
March 31, December 31,
2000 1999
(POUNDS) $ (POUNDS)
(See Note 1)
ASSETS
<S> <C> <C> <C>
FIXED ASSETS:
Property, Plant and Equipment, Net of Accumulated
Depreciation of (POUNDS)152 ($242)
and (POUNDS)139 . . . . . . . . . . . . . . . 1,034 1,650 1,005
Construction Work in Progress. . . . . . . . . . . . 21 33 31

Total Fixed Assets . . . . . . . . . . . . . 1,055 1,683 1,036

CURRENT ASSETS:
Cash and Cash Equivalents. . . . . . . . . . . . . . 9 14 9
Investments. . . . . . . . . . . . . . . . . . . . . 16 26 16
Accounts Receivable, Less Provision for
Uncollectibles of (POUNDS)9 ($14)
and (POUNDS)9 . . . . . . . . . . . . . . . . 141 225 108
Unbilled Revenue . . . . . . . . . . . . . . . . . . 100 159 100
Electricity and Gas Trading Contracts. . . . . . . . 42 67 4
Prepaids and Other . . . . . . . . . . . . . . . . . 50 80 40

Total Current Assets . . . . . . . . . . . . 358 571 277

OTHER ASSETS:
Goodwill, Net of Accumulated Amortization of
(POUNDS)74 ($118) and (POUNDS)68 . . . . . . . . 896 1,429 902
Investments, Long-term . . . . . . . . . . . . . . . 43 69 45
Prepaid Pension Asset. . . . . . . . . . . . . . . . 119 190 115
Other Non-Current Assets . . . . . . . . . . . . . . 22 35 20

Total Other Assets . . . . . . . . . . . . . 1,080 1,723 1,082

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . 2,493 3,977 2,395

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions)
(UNAUDITED)
<CAPTION>
March 31, December 31,
2000 1999
(POUNDS) $ (POUNDS)
(See Note 1)
SHAREHOLDERS' EQUITY AND LIABILITIES
<S> <C> <C> <C>
SHAREHOLDERS' EQUITY
Share capital, (POUNDS)1 par value common shares,
440,000,100 authorized and 440,000,002
issued and outstanding . . . . . . . . . . . . . . 440 702 440
Retained Profit. . . . . . . . . . . . . . . . . . . 39 62 11

Total Shareholders' Equity . . . . . . . . . . . . 479 764 451

LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . . 1,131 1,804 964

SHORT-TERM DEBT REFINANCED FEBRUARY 2000 . . . . . . . - - 165

COMPANY-OBLIGATED MANDATORILY REDEEMABLE TRUST
SECURITIES OF SUBSIDIARY HOLDING SOLELY JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES (NOTE 8) 162 258 166

OTHER NON-CURRENT LIABILITIES:
Deferred Income Taxes. . . . . . . . . . . . . . . . 212 339 195
Provision for Uneconomic Electricity
and Gas Contracts. . . . . . . . . . . . . . . . . 27 43 29
Other . . . . . . . . . . . . . . . . . . . . . . . 14 22 13

Total Other Non-Current Liabilities. . . . . . . . 253 404 237

CURRENT LIABILITIES:
Current Portion of Long-term Debt. . . . . . . . . . 9 14 9
Short-term Debt. . . . . . . . . . . . . . . . . . . 172 275 131
Accounts Payable . . . . . . . . . . . . . . . . . . 64 102 79
Accrued Liabilities and Deferred Income. . . . . . . 73 117 91
Electricity and Gas Trading Contracts. . . . . . . . 39 62 3
Income Taxes Payable . . . . . . . . . . . . . . . . 56 89 58
Other Current Liabilities. . . . . . . . . . . . . . 55 88 41

Total Current Liabilities. . . . . . . . . . . . . 468 747 412

TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . 2,014 3,213 1,944

COMMITMENTS AND CONTINGENCIES (NOTE 4)

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES . . . . . . 2,493 3,977 2,395

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
<CAPTION>
Three Months Ended
March 31, March 31,
2000 1999
(POUNDS) $ (POUNDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . . . . . . 28 45 10
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation of Fixed Asset Investment
Included in Cost of Sales. . . . . . . . 3 5 4
Depreciation and Amortization. . . . . . . 19 30 20
Cumulative Effect of a Change in
Depreciation Method. . . . . . . . . . . (12) (19) -
Loss on Investment in Ionica . . . . . . . - - 1
Deferred Income Tax Liability. . . . . . . 11 17 12
Changes in Assets and Liabilities:
Receivables and Unbilled Revenue . . . . . (33) (53) (15)
Income Taxes Payable . . . . . . . . . . (2) (3) 5
Prepaids and Other Current Assets. . . . . (6) (10) (12)
Prepaid Pension Asset. . . . . . . . . . . (4) (6) (7)
Provision for Uneconomic Electricity
and Gas Contracts. . . . . . . . . . . . (2) (3) (1)
Other Current Liabilities. . . . . . . . . 16 26 15
Accounts Payable . . . . . . . . . . . . . (15) (24) (20)
Accrued Liabilities and Deferred Income. . (18) (29) 12
Other. . . . . . . . . . . . . . . . . . . - - 3

Net Cash (Used) Provided by Operating
Activities . . . . . . . . . . . . . . (15) (24) 27

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures . . . . . . . . . . . (23) (37) (43)
Proceeds from Sale of Discontinued Operations - - 94
Proceeds from Sale of Property,
Plant and Equipment. . . . . . . . . . . 1 2 6
Other. . . . . . . . . . . . . . . . . . . - - 3

Net Cash (Used) Provided by Investing Activities (22) (35) 60

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Long-term Debt . 165 263 -
Repayment of Long-term Debt. . . . . . . . (4) (6) -
Net Change in Short-term Debt. . . . . . . (124) (198) (83)

Net Cash Provided (Used) by
Financing Activities . . . . . . . . . 37 59 (83)

INCREASE IN CASH AND CASH EQUIVALENTS. . . . - - 4

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9 14 8

CASH AND CASH EQUIVALENTS AT END OF PERIOD 9 14 12
</TABLE>

<PAGE>
<TABLE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(UNAUDITED)
<CAPTION>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Three Months Ended
March 31, March 31,
2000 1999
(POUNDS) $ (POUNDS)
<S> <C> <C> <C>
Cash Paid for Interest . . . . . . . . . . . 41 65 39

Cash Paid for Income Taxes . . . . . . . . . 5 8 -

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(in millions, except shares)
(UNAUDITED)
<CAPTION>
For the three months ended March 31, 2000:

Share Capital Retained
Shares Amount Profit Total
(POUNDS) (POUNDS) (POUNDS)
<S> <C> <C> <C> <C>
Balance, January 1, 2000 . . . . 440,000,002 440 11 451
Net Income . . . . . . . . . . . - - 28 28

Balance, March 31, 2000. . . . . 440,000,002 440 39 479

For the three months ended March 31, 1999:

Share Capital Retained
Shares Amount Deficit Total
(POUNDS) (POUNDS) (POUNDS)

Balance, January 1, 1999. . . . . 440,000,002 440 (40) 400
Net Income . . . . . . . . . . . - - 10 10

Balance, March 31, 1999. . . . . 440,000,002 440 (30) 410

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

1. GENERAL

The accompanying unaudited financial statements should be
read in conjunction with the audited financial statements
for the Transition Period ended December 31, 1999 filed in
Form 10-K. In the opinion of management, the financial
statements reflect all adjustments (consisting of only
normal recurring accruals) which are necessary for a fair
presentation of the results of operations for interim
periods.

The consolidated financial statements of Yorkshire Power
Group Limited and its subsidiaries ("Yorkshire Group") are
presented in pounds sterling and in conformity with
accounting principles generally accepted in the United
States of America.

The consolidated balance sheets, income statements,
statements of cash flows and certain information in the
notes to the consolidated financial statements are presented
in pounds sterling ( (POUNDS)) and in US dollars ($) solely
for the convenience of the reader, at the exchange rate of
(POUNDS)1 = $1.5953, the closing mid-point in London on
March 31, 2000. This presentation has not been translated in
accordance with Statement of Financial Accounting Standards
No. 52, "Foreign Currency Translation." No representation
is made that the pounds sterling amounts have been, could
have been, or could be converted into US dollars at that or
any other rate of exchange.

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

2. FINANCING AND RELATED ACTIVITIES

Yorkshire Power Pass-Through Asset Trust 2000-1 (the PATS
Trust) is a New York common law trust, the sole assets of
which consist of (i) a 100% beneficial interest in
(POUNDS)155 million principal amount of Reset Senior Notes,
issued in February 2000 and due February 15, 2020, (the
Senior Notes) issued by Yorkshire Finance 2 (YPF2), a
subsidiary of Yorkshire Power Group (YPG) and (ii) the rights
of the PATS Trust under a currency swap with UBS AG, London
Branch (the Currency Swap) and an option granted to UBS AG,
London Branch (the Call Option).

The PATS Trust has issued $250 million principal amount of
8.25% Pass-Through Asset Trust Securities (PATS) due February
15, 2005 (the Certificates). All of the US Dollar proceeds
from the offering by the PATS Trust of the Certificates have
been swapped by the Trust with UBS AG, London Branch for
(POUNDS) Sterling pursuant to the Currency Swap. The PATS
Trust has used the (POUNDS) Sterling, together with the
proceeds received by the PATS Trust from UBS AG, London
Branch under the Call Option, to purchase the Senior Notes
issued by YPF2. YPF2 has loaned the net proceeds to YPG and
subsidiaries. These proceeds were used as working capital and
for the repayment of debt, including repayment of a loan
which was entered into in December 1999 to repay Tranche B of
Yorkshire Groups syndicated credit facility. YPG has issued
a guarantee that fully and unconditionally guarantees the due
and punctual payment of principal and interest on the Senior
Notes.

3. NEW ACCOUNTING STANDARD

SFAS No. 133, Accounting for Derivative Instruments and
Hedging Activities, was issued in June 1998. This statement
was originally scheduled to be effective for all fiscal
quarters of fiscal years beginning after June 15, 1999: SFAS
No. 137 has delayed the effective date for one year. SFAS 133
establishes accounting and reporting standards for derivative
instruments. It requires that all derivatives be recognized
as either an asset or a liability, measured at fair value, in
the financial statements. If certain conditions are met a

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

3. NEW ACCOUNTING STANDARD (continued)

derivative may be designated as a hedge of possible changes
in fair value of a recognized asset or liability or of an
unrecognized firm commitment; variable cash flows of a
recognized asset or liability or of a forecasted transaction;
or foreign currency exposure. The accounting/reporting for
fair value changes in a derivative used as a hedging
instrument depends on the intended use and resulting
designation of the derivative. Management is currently
studying the provisions of SFAS 133 to determine the impact
of its adoption on results of operations, cash flows and
financial condition. Yorkshire intends to adopt the standard
as required by January 2001.

4. CONTINGENCIES

LEGAL PROCEEDINGS

Reference is made to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 3. "Legal Proceedings"
for details of ongoing litigation with respect to other
corporations' use of actuarial surpluses declared in the
ESPS. Yorkshire made similar use of actuarial surplus and, if
it is decided by the House of Lords that the sums concerned
are all due to the ESPS, the maximum amount payable by
Yorkshire in respect of its use of surplus is approximately
(POUNDS)38 million plus interest.

Reference is made to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 3. Legal Proceedings
for details of ongoing litigation with respect to Optimum
Solutions Limited. The final outcome of this matter cannot be
determined at present.

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

4. CONTINGENCIES (continued)

USE OF ESTIMATES

The preparation of the financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the
financial statements. As a result of the transition to a
more competitive utility environment, estimates are required
for revenues and the costs to produce revenues, including bad
debt expense.

Electricity generated in England and Wales is sold by
generators and bought by suppliers through the Pool. Charges
are raised on a half hourly basis. Prior to opening the
domestic market to competition on September 14, 1998, all
charges were allocated between suppliers based on actual
meter readings. Charges in respect of residential customers,
whose meters are not read at half hourly intervals, were
allocated to the host PES. Since September 14, 1998, it is
necessary to allocate charges in respect of residential
customers between suppliers based on estimates.

Actual results could differ from the Companys estimates.

REVISION TO ASSET LIVES

In addition to the change in depreciation method,
Yorkshire Group has revised the estimated useful economic
lives of its distribution network assets in order to provide
a more accurate estimated life for each asset type. Such
assets are now depreciated over a period of between 10 and 80
years. In the quarter ended March 31, 2000, the effect of
this change was to increase net income by (POUNDS)1 million.
The effect of the change in the year ending December 31,
2000 is expected to be an increase in net income of
(POUNDS)4 million.

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

4. CONTINGENCIES (continued)

OFGEM PRICE CONTROL REVIEW

Following the conclusion of the electricity distribution
and supply price control reviews and other Ofgem initiatives,
a number of PES licence modifications became effective on
April 1, 2000. Consequently, from that date, there has been a
reduction in the prices Yorkshire can charge its distribution
and supply customers. For details of the price control
reviews refer to Form 10-K for the Transition Period ended
December 31, 1999, Part I, Item 1 Yorkshires Businesses -
Industry Background - Distribution of Electricity -
Distribution Price Regulation from April 1, 2000 and
Yorkshires Businesses - Industry Background Supply of
Electricity - Electricity Supply Price Regulation from April
1, 2000.

In response to Ofgems final proposals and increasing
competition, Yorkshire has adopted an aggressive program of
reducing controllable costs. Significant features of this
program include reductions in capital expenditure, staff
reductions, outsourcing of certain functions and
consolidation of facilities. Yorkshire intends to
aggressively pursue this cost reduction program and is
evaluating additional cost reduction measures to further
mitigate the effects of Ofgems final proposals and
increasing competition in the electricity supply business.
Yorkshire Group expects that the net result of Ofgems
electricity supply and distribution price reductions, and
competitive demands in the Supply business and Yorkshires
mitigation efforts will be a decline in Yorkshire Groups
results of operations and a reduction in its cash flows
which, in each case, may be significant.

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

5. RATIONALIZATION

Yorkshire plans to streamline its distribution and Supply
workforces and has announced a reduction of approximately 350
positions (260 positions from the distribution business and
90 positions from the Supply business) during 2000 and a
further 75 positions from the distribution business in 2001.
A provision of approximately (POUNDS)7 million has been
recorded in January 2000 (in Selling, General and
Administrative expenses) to reflect the cost of the 350
reductions in 2000. The majority of these redundancies are
expected to take place in the latter half of 2000. The
balance of the provision at March 31, 2000 was approximately
(POUNDS)6 million.

Such streamlining is part of the overall program of
reducing controllable costs in response to Ofgems final
distribution and supply price control reviews and to
increasing competition in the Supply business.
<PAGE>
<TABLE>
6. BUSINESS SEGMENTS

Yorkshire Group is primarily engaged in two businesses:
electricity distribution, which involves the transmission of
electricity across its network to end users, and supply,
which involves bulk purchase of electricity and gas for
delivery to its customers. These businesses form the basis
for the identification of reportable segments as shown below.
Included in Other are insignificant operating subsidiaries
as well as various corporate activities, and non-allocated
corporate assets.

Management evaluates segment performance based on segment
income from operations, which is shown below.

Intersegment sales primarily represent sales from the
distribution business to the Supply business for use of the
distribution network.

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

6. BUSINESS SEGMENTS (continued)

A summary of information about Yorkshire Groups
operations by segments follows (in millions):
<CAPTION>

Three Months Ended March 31, 2000

Distribution Supply Other Eliminations Consolidated
and non-
allocated
items
(POUNDS) (POUNDS) (POUNDS) (POUNDS) (POUNDS)
<S> <C> <C> <C> <C> <C>
Revenues from
external customers 27 396 - - 423
Intersegment sales 60 7 - (67) -
Income (loss) from
operations 42 25 (2) (6) 59
Total assets 1,094 453 2,832 (1,886) 2,493

Three Months Ended March 31, 1999

Distribution Supply Other Eliminations Consolidated
and non-
allocated
items
(POUNDS) (POUNDS) (POUNDS) (POUNDS) (POUNDS)

Revenues from
external customers 19 375 - - 394
Intersegment sales 66 11 4 (81) -
Income (loss) from
operations 40 14 - (5) 49
Total assets 960 417 2,586 (1,616) 2,347

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

6. BUSINESS SEGMENTS (continued)

Non-allocated items within total assets consist solely of
goodwill of (POUNDS)896 million at March 31, 2000 and
(POUNDS)925 million at March 31, 1999.

Non-allocated items within income (loss) from operations
consist principally of amortization of goodwill of
(POUNDS)6 million in the three months ended March 31 for
both 2000 and 1999.
</TABLE>
<PAGE>
7. EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE

Yorkshire Group has implemented a change in the
depreciation method for its distribution network assets.
Previously distribution network assets were depreciated at a
rate of 3% per annum for 20 years and 2% per annum for the
remaining 20 years. A straight line depreciation method has
now been implemented for such assets as this is believed to
better match the cost of the assets with the anticipated
usage pattern. The effect of this change in the three months
ended March 31, 2000 was to increase net income by (POUNDS)1
million. The cumulative effect of this change in accounting
principle on prior accounting periods to December 31, 1999 is
an increase in income of approximately (POUNDS)8 million,
after a reduction for income taxes of (POUNDS)4 million
recorded in the quarter ended March 31, 2000.

YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

8. COMPANY-OBLIGATED MANDATORILY REDEEMABLE TRUST SECURITIES OF
SUBSIDIARY HOLDING SOLELY JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES

Yorkshire Capital Trust I, (the Trust), is a statutory
business trust wholly owned by Yorkshire Power Group Limited,
created for the sole purpose of issuing trust securities and
investing the proceeds in an equivalent amount of Junior
Subordinated Deferrable Interest Debentures, Series A due
2038 (the Debentures) issued by Yorkshire Power Finance
Limited (Yorkshire Finance), a subsidiary of Yorkshire
Power Group Limited. On June 9, 1998 the Trust issued
11,000,000 shares of 8.08% Trust Securities at the
liquidation amount of $25 per Trust Security. The Trust
invested the $275 million proceeds in an equivalent amount of
Debentures, of Yorkshire Finance. Yorkshire Finance in turn
loaned the net proceeds to Yorkshire Power Group Limited.
Substantially all of the Trusts assets consist of the
Debentures.

The Trust Securities are subject to mandatory redemption
upon payment of the Debentures at maturity or upon
redemption. The Debentures are redeemable, in whole or in
part at the option of Yorkshire Finance or at any time upon
the occurrence of certain events. Yorkshire Power Group
Limited considers that the mechanisms and obligations
relating to the Trust Securities issued for its benefit,
taken together, constitute a full and unconditional guarantee
by it of the Trusts payment obligations with respect to the
Trust Securities.

Since June 1998 Yorkshire Group has repurchased 385,000
Trust Securities with a nominal value of approximately $10
million.

9. ENERGY TRADING CONTRACTS

During the first quarter of 2000, Yorkshire Group
substantially increased the volume of its energy trading
operations. The purpose of these operations is to increase
the net income of Yorkshire Group.

The instruments used are forwards,options, and
swaps. In accordance with EITF 98-10 Accounting for
Contracts Involved in Energy Trading and Risk Management
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)
<PAGE>
<TABLE>
9. ENERGY TRADING CONTRACTS (continued)

Activities, the open contracts are marked to market and
recorded in operating revenues. Revenues and costs of settled
contracts are shown gross in operating revenues and cost of
sales, respectively. At March 31, 2000, the fair
values of such trading contracts are reported as current
assets and liabilities. The notional amounts and fair values
of the contracts as of March 31, 2000 are
summarized in the following table.
<CAPTION>

Notional Fair Value
Amount (in millions)
(GWH) (POUNDS)
Assets
<S> <C> <C>
Electricity

Forwards 2,506 30
Options - -
Swaps - -

Gas

Forwards 312 -
Options 227 -
Swaps 30,096 12

Liabilities

Electricity

Forwards 1,719 24
Options - -
Swaps - -

Gas

Forwards 781 1
Options - -
Swaps 33,412 14

The amount of income recorded for the three months ended
March 31, 2000 was a realized gain of (POUNDS)1 million before
income taxes. The amount of income from these activities
was not material in 1999. Dependant on
</TABLE>
<PAGE>
YORKSHIRE POWER GROUP LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED)

9. ENERGY TRADING CONTRACTS (continued)

future electricity and gas market conditions and prices, the
open trading contracts could produce material income or
losses in future periods.
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION

Quarter Ended March 31, 2000 vs Quarter Ended March 31, 1999

RESULTS OF OPERATIONS

Net income for the year to date period increased by
(POUNDS)18 million (180%) from (POUNDS)10 million to
(POUNDS)28 million. This is due primarily to the following:
an increase in gross margin attributable to the gas and
electricity supply businesses and the cumulative benefit of
the effect on prior years of a revised depreciation method.

Income statement line items that changed significantly
were:

Increase
In millions
(POUNDS) %

Operating Revenues 29 7
Gross Margin 9 7
Provision for Income Taxes 3 43
Cumulative effect on prior years 8 N/A
(to December 31, 1999) of
changing to a different
depreciation method

Net Income 18 180

Electricity supply operating revenues have increased
primarily as a result of growth in the volume supplied to the
non-residential electricity supply market.

Revenues attributable to the distribution business have
increased due to the competitive market creating growth in
external revenues for the use of the distribution network.

Gross margin for the electricity supply business has
increased, primarily due to lower electricity pool costs and a
rise in the volume of units sold. This has been partly offset
by a rise in CFD payments when compared to the same period
last year.

While results in the first quarter are favorable compared
to the results for the quarter to March 31, 1999 it is
anticipated that revenues will be subject to strong
competitive pressures during the remainder of the year, and
impacted by the implementation of the price control reviews
from April 1, 2000. In addition the method of trading
electricity will change following the implementation of NETA
which is scheduled to be in place by October 31, 2000. It is
anticipated that NETA will make the market for the sale of
electricity by generators more competitive.

Although gas supply revenues increased as the number of
residential gas supply customers rose, sales volumes were
below expectations partly due to the effect of warmer weather.
However, lower gas purchase costs have led to an improvement
in gross margin for the gas supply business.

Selling, general and administrative costs in the first
quarter of 2000 moved little compared to 1999 because the
increase in rationalization costs in 2000 was offset by a
reduction in costs incurred in 1999 in relation to Year 2000
modifications and in costs associated with the development of
new systems to facilitate competition.

Expenditure of (POUNDS)9 million charged to maintenance in
the three month period ended March 31, 1999 has been restated
as Selling, General and Administrative expenditure so as to be
consistent with the position of these costs for the three
month period ended March 31, 2000.

The provision for income taxes has increased in line with
the increased profitability of Yorkshire Group in the quarter
ended March 31, 2000.

EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE

Yorkshire Group has implemented a change in the
depreciation method for its distribution network assets.
Previously distribution network assets were depreciated at a
rate of 3% per annum for 20 years and 2% per annum for the
remaining 20 years. A straight line depreciation method has
now been implemented for such assets as this is believed to
better match the cost of the assets with the anticipated usage
pattern. The effect of this change in the three months ended
March 31, 2000 was to increase net income by (POUNDS)1
million. The cumulative effect of this change in accounting
principle on prior accounting periods to December 31, 1999 is
an increase in income of approximately (POUNDS)8 million,
after a reduction for income taxes of (POUNDS)4 million
recorded in the quarter ended March 31, 2000.

REVISION TO ASSET LIVES

In addition to the change in depreciation method,
Yorkshire Group has revised the estimated useful economic
lives of its distribution network assets in order to provide a
more accurate estimated life for each asset type. Such assets
are now depreciated over a period of between 10 and 80 years.
In the quarter ended March 31, 2000, the effect of this change
was to increase net income by (POUNDS)1 million. The effect
of the change in the year ending December 31, 2000 is expected
to be an increase in net income of (POUNDS)4 million.

FINANCIAL CONDITION

The PATS Trust has issued $250 million principal amount of
8.25% Pass-Through Asset Trust Securities (PATS) due February
15, 2005 (the Certificates). All of the US Dollar proceeds
from the offering by the PATS Trust of the Certificates have
been swapped by the Trust with UBS AG, London Branch for
(POUNDS) Sterling pursuant to the Currency Swap. The PATS
Trust has used the (POUNDS) Sterling, together with the
proceeds received by the PATS Trust from UBS AG, London
Branch under the Call Option, to purchase the Senior Notes
issued by YPF2. YPF2 has loaned the net proceeds to YPG and
subsidiaries. These proceeds were used as working capital and
for the repayment of debt, including repayment of a loan
which was entered into to repay Tranche B of Yorkshire
Groups syndicated credit facility. YPG has issued a
guarantee that fully and unconditionally guarantees the due
and punctual payment of principal and interest on the Senior
Notes.

ENERGY TRADING CONTRACTS

The instruments used are forwards,options, and
swaps. In accordance with EITF 98-10 Accounting for
Contracts Involved in Energy Trading and Risk Management
Activities, the open contractss are marked to market and
recorded in operating revenues. Revenues and costs of settled
contracts are shown gross in operating revenues and cost of
sales, repectively. At March 31, 2000, the fair
values of such trading contracts are reported as both current
assets and liabilities. The notional amounts and fair
values of the contracts as of March 31, 2000 are
summarized in the following table.

Notional Fair Value
Amount (in millions)
(GWH) (POUNDS)
Assets

Electricity

Forwards 2,506 30
Options - -
Swaps - -

Gas
Forwards 312 -
Options 227 -
Swaps 30,096 12

Liabilities

Electricity

Forwards 1,719 24
Options - -
Swaps - -

Gas

Forwards 781 1
Options - -
Swaps 33,412 14

The amount of income recorded for the three months ended
March 31, 2000 was a realized gain of (POUNDS)1 million before
income taxes. The amount of income from these activities
was not material in 1999. Dependant on future electricity
and gas market conditions and prices, the open trading
contracts could produce material income or losses in future periods.

MARKET RISKS

Yorkshire Group has certain market risks inherent in its
business activities, arising from the purchase and sale of
electricity and gas, changes in foreign currency exchange
rates and interest rates. Market risk represents the risk of
loss that may impact Yorkshire Group due to adverse changes
in market prices and rates.

Yorkshire Groups exposure to commodity price variability
has increased as a result of increased energy trading
(conducted in accordance with Value at Risk parameters
approved by Yorkshire Group) during the quarter ended March
31, 2000. Risks arising from changes in foreign currency
exchange rates and interest rates has not changed
significantly since December 31, 1999. For details on
electricity and gas trading see Part I, Note 9. Energy
Trading Contracts. For further details on market risk, see
Part II, Item 7A. Quantitative and Qualitative Disclosures
About Market Risk in Form 10-K.

RATIONALIZATION

Yorkshire plans to streamline its distribution and Supply
workforces and has announced a reduction of approximately 350
positions (260 positions from the distribution business and
90 positions from the Supply business) during 2000 and a
further 75 positions from the distribution business in 2001.
A provision of approximately (POUNDS)7 million has been
recorded in January 2000 to reflect the cost of the 350
reductions in 2000. The majority of these redundancies are
expected to take place in the latter half of 2000. The
balance of the provision at March 31, 2000 was approximately
(POUNDS)6 million.

LEGAL PROCEEDINGS

OFGEM PRICE CONTROL REVIEW

Following the conclusion of the electricity distribution
and supply price control reviews and other Ofgem initiatives,
a number of PES license modifications became effective on
April 1, 2000. Consequently, from that date, there has been a
reduction in the prices Yorkshire can charge its distribution
and supply customers. For details of the price control
reviews refer to Form 10-K for the Transition Period ended
December 31, 1999, Part I, Item 1 Yorkshires Businesses -
Industry Background - Distribution of Electricity -
Distribution Price Regulation from April 1, 2000 and
Yorkshires Businesses - Industry Background - Supply of
Electricity - Electricity Supply Price Regulation from April
1, 2000.

EUROPEAN MONETARY UNION

On January 1, 1999, 11 European Union countries formed an
economic and monetary union and introduced a single currency,
the Euro. Although the UK did not join at this time, the UK
Government has indicated that it may join in the future.
Management is currently assessing the effort required to
prepare Yorkshire Group for the potential introduction of the
Euro in the UK.

PART II. OTHER INFORMATION

Item 5. Other Information

Reference is made to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 1 "Yorkshire Group and
US Parents - AEP" for details of the planned merger between
AEP and CSW. The merger has received US Federal Energy
Regulatory Commission approval subject to certain conditions.
These conditions have now been accepted by AEP and CSW.
Assuming the receipt of approval by the US Securities and
Exchange Commission, the AEP/CSW merger is currently expected
to be completed in the first half of 2000.

Reference is made to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 1 "Yorkshire's
Businesses - Supply Business - Electricity Supply Risk
Management" for details of Ofgem's final guidelines for its
proposed license condition to prevent abuse of the wholesale
electricity market by generators. Five of the seven
generators who will be initially covered have now agreed to
the condition. On May 3, 2000, Ofgem referred the two
generators who have not agreed to the condition (AES and
British Energy) to the Competition Commission. The proposed
market abuse condition prohibits action that would materially
prejudice the efficient balancing of the transmission system,
limiting generation or capacity in such a way as to increase
wholesale prices and unduly discriminatory pricing policies.

Following the conclusion of the electricity distribution
and supply price control reviews and other Ofgem initiatives,
a number of PES license modifications became effective on
April 1, 2000. Those which significantly impact Yorkshire are
the revised electricity distribution and supply price control
formulae and the business separation provisions. For details
of the price control reviews refer to Form 10-K for the
Transition Period ended December 31, 1999, Part I, Item 1
"Yorkshire's Businesses - Industry Background - Distribution
of Electricity - Distribution Price Regulation from April 1,
2000" and "Yorkshire's Businesses - Industry Background -
Supply of Electricity - Electricity Supply Price Regulation
from April 1, 2000".

The regulatory review of business separation has
effectively been concluded. Ofgem has issued the anticipated
direction against its separation requirements on the basis of
the compliance plan submitted by Yorkshire. This direction
allows for the continued sharing of some services. Yorkshire
has established a business separation programme to manage the
implementation of its compliance plan and intends to manage
the costs of business separation within the (POUNDS)7.5
million allowance included in the distribution price control
provisions which came into effect on April 1, 2000. For
further details and the implications of business separation
for Yorkshire, refer to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 1 "Yorkshire's
Businesses - Business Separation".

Reference is made to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 1 "The Electric Utility
Industry in Great Britain - Industry Structure" for details
of the proposed joint venture between TXU Europe Group plc
and London Electricity, a subsidiary of EdF. The European
Commission has now cleared this joint venture and Ofgem has
set a number of conditions. In this context, Ofgem has also
published the principles on which it will base consideration
of future distribution business combinations. A number of
regulatory issues arise from this joint venture and these are
to be addressed through undertakings by both companies. The
undertakings are consistent with those given in precedent
transactions.

Reference is made to Form 10-K for the Transition Period
ended December 31, 1999, Part I, Item 1 "Yorkshire's
Businesses - Regulation Under the Electricity Act -
Regulatory Developments - Financial Ringfencing" for details
of Ofgems consultation paper on the financial ringfencing
conditions for the standard license conditions to apply to
the separate electricity supply and distribution licenses to
be issued under the UK governments proposed Utilities Bill,
if enacted. On April 27, 2000, Ofgem decided that it would
recommended to the Secretary of State that there should be
draft ringfencing conditions for the new distribution
licenses designed to prevent distribution license holders
from undertaking any other significant activities beyond
their licensed activities without Ofgems consent.

However, these draft ringfencing conditions contain a
significant amendment to the proposals contained in the
earlier consultation paper. The earlier consultation had
proposed a provision to include in any compliance certificate
which is required prior to the payment of dividends a
confirmation that the licensee has complied in full with any
applicable enforcement order or direction made by Ofgem then
in force. The new draft conditions reduce the circumstances
in which the existence of an outstanding enforcement order or
direction would prevent the payment of dividends.

Ofgem has also decided to recommend that no financial
ringfencing conditions should apply to electricity supply
licensees as Ofgem believes it is inappropriate to apply
ringfencing restrictions to electricity supply companies
since such an application is likely to distort or even
prevent the development of competition.

It remains unclear whether Ofgem would require financing
to be conducted at the level of the legally separate
distribution and supply businesses or at the holding company
level.

For further details of the Utilities Bill, please refer to
Form 10-K for the Transition Period ended December 31, 1999,
Part I, Item 1 "Yorkshire's Businesses - Regulation Under the
Electricity Act - Regulatory Developments - Review of the
Regulatory Framework.

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

Exhibit 10.15 - Yorkshire Electricity Group plc Public
Electricity Supply License modifications dated April 1, 2000.

Exhibit 18 - Letter in respect of change in accounting
principle.

Exhibit 27 - Financial Data Schedule.

(b) Reports on Form 8-K:

A report on Form 8-K, dated December 20, 1999, was filed
during the quarter ended March 31, 2000, under Item 5 of Form
8-K, in respect of the supply and distribution price control
reviews.

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.

YORKSHIRE POWER GROUP LIMITED

BY: /S/ Armando A. Pena

Armando A. Pena
Chief Financial Officer and Director
May 11, 2000

Exhibit 10.5

MODIFICATIONS TO THE PUBLIC ELECTRICITY SUPPLY LICENCES ISSUED TO
POWERGEN ENERGY PLC, EASTERN ELECTRICITY PLC, MANWEB PLC, NORTHERN
ELECTRICITY PLC, NORWEB PLC, SEEBOARD PLC, SOUTHERN ELECTRIC PLC AND
YORKSHIRE ELECTRICITY GROUP PLC

SCHEDULE

The following modifications shall apply on and after: 1 April 2000.

1. The definition of Distribution Business in Condition 1 shall be amended
to read as follows:

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 Licensees 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
- - data processing services
- - data aggregation services, and
- - data retrieval services

2. The definition of Supply Business in Condition 1 shall be amended by the
addition of the words (including prepayment meter services, data processing
services, data aggregation services and data retrieval services) after public
electricity supplier.

3. Condition 11D paragraph 3 shall be amended by adding after prepayment
meter services the words data processing services, data aggregation services
and data retrieval services.

4. Condition 12 shall be deleted and the new Conditions 12, 12A and 12B set out
in Annex A hereto shall be inserted in its place.

Annex A
Condition 12. 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) In the following circumstances, namely;
i) 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 or
any external distribution activities and require access to the information
for that purpose; and
ii) to personnel of any other holder of a public electricity supply licence (a
PES licence holder) engaged in the external distribution activities of that
PES licence holder to the extent necessary for the performance by such
personnel of those external distribution activities, and the use by such
personnel of that information for that purpose;
provided that effective arrangements are maintained in place at all times for
ensuring that no further disclosure of any information supplied or obtained
pursuant to this paragraph is made and that such information is used only
for the purpose of the Distribution Business or any external distribution
activities of the Licensee.
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;
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 or any external distribution
activities.
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 and any external
distribution activities from each other business (whether or not a Separate
Business) of the Licensee and of its affiliates and related undertakings.
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 of any affiliate or related
undertaking of the Licensee), other than the Distribution Business or
any external distribution activities, 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 or
any external distribution activities;
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 or any external distribution activities also have
access;
iii) equipment, facilities or property employed for the management or
operation of the Distribution Business or any external distribution
activities; 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 or any external distribution activities; 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 of any affiliate or
related undertaking of the Licensee) until the expiry of an appropriate time
from the date on which he ceased to be engaged by the Distribution Business.
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 of any affiliate or related undertaking of the Licensee):
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.
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. (a) This paragraph applies only in circumstances in which the Licensee
does not itself carry out any Metering and Data Services as part of the
Distribution Business but those services are provided for it by an agent
acting independently of the Licensee which is not an affiliate of the
Licensee and in which the Licensee
holds no shares or other financial interest (a metering agent)

(b) Where paragaph (a) applies, the Licensee may disclose confidential
information to its metering agent notwithstanding that the metering agent
provides Metering and Data Services to the Supply Business of the Licensee
or to others, provided that the Licensee maintains, and procures that the
metering agent also maintains, in place at all times effective arrangements
so that the metering agent does not disclose information relating to the
Distribution Business to the Licensee in its capacity as electricity supplier
except to the extent necessary for the metering agent to provide Metering
and Data Services as part of the Distribution Business to the Supply Business
of the Licensee.
11. In this Condition:

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 United
Kingdom, the United States of America or
the European Community.

confidential information
bears the meaning given at paragraph 1.

external distribution
activities
means any business of the Licensee or
any affiliate or related undertaking of the
Licensee comprising or ancillary to the
maintenance, repair or operation of, or
other activities in connection with any
electricity distribution system other than
the Licensees Distribution System (an
external distribution system)

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>
<CAPTION>
<S> <C>
Condition 12A. Appointment of Compliance Officer
1. The Licensee shall no later than 31 May 2000 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 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
(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 12 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) investigating any complaint or representation made available to him in
accordance with paragraph 7;
(d) recommending and advising upon the remedial action which any such
investigation has demonstrated to be necessary or desirable;
(e) providing relevant advice and information to the Licensee for the
purpose of ensuring its effective implementation of:
(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
(f) reporting annually to the directors of the Licensee - in respect
of the year ending 31 December 2000 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:
(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 12
and the terms and conditions of any direction
issued pursuant to paragraph 7 of Condition
12.

Condition 12B. Restriction on use of certain information relating to the
Supply Business

1. Where the Licensee or any affiliate or related undertaking of the
Licensee or any agent or other person acting on its behalf receives,
in the course of providing Metering and Data Services as part of
the Supply Business, information from any person, such information
shall be treated as relevant information for the purposes of this Condition
and, subject to paragraph 7, the provisions of this Condition shall apply
to that information, save where the person providing the information
notifies (or otherwise agrees with) the
Licensee that the information need not be treated as relevant.

2. The Licensee shall not (and shall procure that its affiliates
and related undertakings and
any person acting on its or their behalf shall not) use relevant
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.

3. The Licensee shall not (and shall procure that its affiliates
or related undertakings and
any person acting on its or their behalf shall not) authorise access to
relevant information to any of its (or its affiliates and related
undertakings) employees, agents, consultants or contractors save
insofar as such persons require access to the
information for the effective operation of the Metering and Data Services
provided by the Supply Business.

4. The Licensee shall use all reasonable endeavours to ensure that
any person with authorised access to relevant information in accordance
with paragraph 3 shall use such
information only for the purposes for which it was provided.

5. The Licensee shall not (and shall procure that its affiliates and
related undertakings and any person acting on its or their behalf
shall not) disclose relevant information other
than:

(a) subject to paragraph 6, to any professional or other advisers who
require such information for the purpose of providing advice which
is necessary for the effective
operation of the Metering and Data Services provided by the Supply Business;

(b) to the Director; and

(c) where the Licensee ( or any affiliate or related undertaking of the
Licensee) is required or permitted to disclose such information:

(i) in compliance with its duties under the Act or any other requirement of a
Competent Authority;

(ii) in compliance with 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) in compliance with any other requirement of law;

(iv) in response to a requirement of any Stock Exchange, the Panel
on Take-overs and Mergers or any regulatory authority; or

(v) pursuant to the arbitration rules for the Electricity Arbitration
Association or pursuant to any judicial or other arbitral process or
tribunal of competent jurisdiction.

6. Where relevant information is disclosed in accordance with
sub-paragraph 5(a), the Licensee shall ensure that any persons to whom
that information is disclosed are aware
that it is relevant information, and shall take reasonable steps to
ensure that such persons do not disclose that information save
in accordance with the provisions of this Condition.

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.

8. The Licensee shall no later than 31 May 2000 prepare a statement in a form approved by
the Director setting out the practices, procedures and systems the Licensee has adopted
(or intends to adopt) to ensure its compliance:

(a) with paragraphs 2 to 6 of this Condition; and

(b) in the provision of Metering and Data Services as part of the Supply Business, with its
obligations not to restrict, distort or prevent competition.

9. 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 8
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.

10. The Licensee shall take all reasonable steps to ensure that it complies with the practices
and procedures set out in the statement prepared in accordance with paragraph 8 (as
from time to time revised).

11. The Licensee shall send a copy of the statement prepared in accordance with paragraph
8, and of each revision of such statement in accordance with paragraph 9, to the
Director.

12. The Licensee shall give or send a copy of the statement prepared in accordance with
paragraph 8, or (as the case may be) of the latest revision of such statement in
accordance with paragraph 9, to any person who requests a copy of such statement.

13. Wherever required by the Director to do so (but not more than once in each calendar
year) the Licensee shall produce a report as to its compliance with the practices and
procedures set out in the statement prepared in accordance with paragraph 8, and such
report shall:

(a) detail the procedures followed by the Licensee for monitoring its compliance with
paragraph 10;

(b) refer to such other matters as are or may be appropriate in relation to the operation
of the practices, procedures and systems adopted by the Licensee;

(c) outline the content of any representations received by the Licensee in respect of the
practices and procedures set out in the statement prepared in accordance with
paragraph 8, and detail such steps as were taken by the Licensee in response to
those representations; and

(d) specify any remedial action taken by the Licensee to ensure its conformity with the
statement prepared in accordance with paragraph 8.

14. The Licensee shall submit to the Director a copy of the report produced in accordance
with paragraph 13, and shall give or send a copy of the report to any person who
requests such a copy.

15. In this Condition:

Competent Authority means the Secretary of State, the Director and any local or
national agency, authority, department, inspectorate, minister,
ministry, official or public or statutory person (whether
autonomous or not) of, or of the government of, the United
Kingdom, the United States of America or the European
Community.

relevant information means all information required to be treated as such under
paragraph 1, but shall exclude all information that is in or enters
into the public domain otherwise than as a consequence of
unauthorised disclosure by the Licensee or any affiliate or related
undertaking of the Licensee (or by any person to whom the same
is disclosed or suffered to be disclosed by the Licensee or such
affiliate or related undertaking).

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.

Licence Conditions - Electricity

Condition 18, 12, 30, and 31: Code of Practice on Payment of Bills and Guidance for Dealing
with Customers in Difficulty

1. The Licensee shall, no later than 1 September 2000, 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, so far as reasonably
practicable, 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 any information provided by other persons or organisations, the
ability of customers to comply with such arrangements; and
(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).
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 [23A, 17A, 36 and 37].

Condition 18A, 12A, 30A, and 31A: Code of Practice on the Use of Prepayment Meters

1. The Licensee shall, no later than 1 September2000, prepare and submit to the Director for his approval a
code of practice concerning the use of prepayment meters by its Domestic Customers, including
appropriate guidance for the assistance of its prepayment meter customers who wish to take a supply of
electricity on other terms.
2. The code of practice shall set out the Licensees policy on the installation of prepayment meters and
shall include procedures by which the Licensee will where appropriate:
(a) provide general information for customers on the operation, usefulness, advantages and
disadvantages of prepayment meters, including details of:
(i) token outlets and card or key charging facilities within the areas supplied with
electricity by the Licensee;
(ii) the actions available to customers on the malfunction of a prepayment meter or a
prepayment card or key; and
(iii) any standards of performance (and associated payments) applying to the Licensee in
relation to premises supplied by it through prepayment meters;
(b) arrange for the calibration of any prepayment meter provided in accordance with sub-paragraph
2(f) of Condition [18, 12, 30, and, 31] so as to take into account, having due regard to all
information available to the Licensee (including any information provided by other persons or
organisations), the relevant customers ability to pay any charges due from him under the
arrangements contemplated by that Condition in addition to the other charges lawfully being
recovered through the prepayment meter;
(c) arrange for the re-calibration of prepayment meters:
(i) in the case of an individual customer, at the conclusion of any such arrangements
applying to that customer; and
(ii) generally, following changes in the price at which the Licensee supplies electricity to
prepayment meter customers; and
(d) remove prepayment meters, setting out the timescale and the conditions under which such
removal might be expected to take place.
3. This Condition is subject to the provisions of Condition [23A, 17A, 36 and 37].

Condition 19, 13, 35, and 36: Record of and Report on Performance

1. The Licensee shall keep a record of its general operation of the arrangements mentioned in Conditions
[18, 18A, 19A, 20, 20A, 21, 22 and 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 its performance in relation to the provision of electricity
supply to its Domestic Customers under the terms of contracts or in accordance with tariffs fixed under
Section 18 of the Act.
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 (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 Domestic 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.
[* Also Conditions: 12, 12A, 13A, 14, 14A, 15, 16, 17; 30, 30A, 30B; 31, 32, 33, 34; 31, 31A, 31B, 32, 33, 34, 35]

Condition 19A, 13A, 30B, 31B: Provision of Services for Persons who are Blind or Deaf

1. The Licensee shall, no later than 1 September 2000, prepare and submit to the Director for his approval a
code of practice detailing the special services the Licensee will make available for its Domestic Customers
who are disabled by virtue of being blind or partially sighted, or deaf or hearing impaired.
2. The code of practice shall include arrangements by which the Licensee will, on request, in each case free
of charge:
(a) make available to its 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
(b) make available to its 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. This Condition is subject to the provisions of Condition [23A, 17A, 36, 37].

Condition 20, 14, 31, 32: Provision of Services for Persons who are of Pensionable Age or
Disabled or Chronically Sick

1. The Licensee shall, no later than 1 September 2000, 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. The code of practice shall include
arrangements by which the Licensee will on request of such customers, where reasonably practicable and
appropriate, and in each case free of charge:
(a) provide special controls and adaptors for electrical appliances and meters (including prepayment
meters) and reposition meters;
(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); and
(e) provide, where neither the customer nor anyone living with him is able to read the electricity
meter, for the meter to be read once in each quarter and for the customer to be informed of the
readings so obtained.
2. The code of practice shall further include arrangements whereby the Licensee will:
(a) establish a list (the Priority Service Register) of customers who , by virtue of being of
pensionable age or disabled or chronically sick, require:
(i) information and advice in respect of the matters set out at paragraph 1; or
(ii) advance notice of planned interruptions to the supply of electricity;
(b) notify its customers at least once each year of the existence of the Priority Service Register and of
how they may be included on it; and
(c) maintain the Priority Service 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:
(i) give to those of its own customers so registered, in respect of the matters set out at
paragraph 1; and
(ii) 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.
3. This Condition is subject to the provisions of Condition [23A, 17A, 36, 37].

Condition 22, 16, 33, 34: Efficient Use of Electricity

1. The Licensee shall, no later than 1 September 2000, 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, in each case given or prepared by a suitably qualified person, as will, in
the opinion of the Licensee enable customers to make informed judgments on measures to improve the
efficiency with which they use the electricity supplied to them.
2. The 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
Licensees 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.
3. 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 in relation to the efficient use of electricity
published by the Director pursuant to Section 48 of the Act
in such manner and at such times as will comply with those directions.
4. This Condition is subject to the provisions of Condition [23A, 17A, 36, 37].

Condition 23A, 17A, 36, 37: 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
Conditions [18, 18A, 19A, 20, 20A, 22 and 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.

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) at least once in each year, 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.
[* Also Conditions: 12, 12A, 13A, 14, 14A, 16, 17; 30, 30A, 30B, 31, 32, 33, 34; 31, 31A, 31B, 32, 33, 34, 35]

Condition 35, 30, 43, 44: 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 twice-monthly or fortnightly or more regularly, such sums as agreed;
(ii) paying monthly a predetermined sum; and
(iii) 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.
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

Condition 37, 32, 45, 46: 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 11/2 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 for more than a month, it shall pay the customer simple interest on
the deposit at the rate which is from time to time equivalent to the base rate of Barclays Bank Plc or, if there
is no such base rate, not less than such base rate as the Director may designate for the purposes thereof.

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

(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.

Licence Conditions - Gas

Condition 3: Standard Contractual Terms of Supply to Domestic Customers

1. The licensee shall-
(a) determine the terms on which it is prepared to enter into a contract for the supply of gas to a
domestic customer and, for the purposes of this sub-paragraph -
(i) different terms may be determined for different cases or classes of cases, or for
different areas;
(ii) terms as to charges may be expressed as subject to transportation adjustments within
the meaning of paragraph (2) but, in such case, the licensee shall, if so requested by a
potential domestic customer (within the meaning of standard condition 2), give him
particulars, so far as is reasonably practicable, of the transportation adjustments (if
any) likely to be made to the charges in respect of the supply of gas to premises
specified in the request;
(iii) the terms shall include ones which correspond, as nearly as may be (save in so far as
they may provide for lower charges), to those of a deemed contract under paragraph 8
of Schedule 2B to the Act, and
(iv) so far as the terms provide for charges related to the amount of gas supplied they shall
provide that the number of kilowatt hours supplied shall be calculated in the same
manner as the number of kilowatt hours conveyed to the premises falls to be calculated
in pursuance of section 12(1) of the Act or, where the premises in question are
secondary sub-deduct premises, in the same manner as such number would have fallen
to be so calculated if the gas had been conveyed to those premises by a public gas
transporter;
(b) send copies of each of the forms of contract (as revised from time to time) under which it
supplies or offers to supply gas:
(i) on receipt of a request, to any person; and
(ii) not later than the date on which it first offers to supply gas under each such form of
contract (or revision thereof), to the Director and the Gas Consumers Council;
(c) prepare , in respect of each form of contract:
(i) a document which sets out an accurate summary of the principal terms of
that form of contract; and

(ii) particulars of any inducements offered to any person entering into such a
contract which might reasonably be expected materially to affect the
decision whether or not to enter into it; and
(d) publish the documents and particulars referred to at sub-paragraph (c) 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 and Gas Consumers Council no later than the date on which they are
published,
and, for the purposes of sub-paragraph (c), principal terms means terms as to charges (and as to
whether or not they are expressed as subject to transportation adjustments within the meaning of
paragraph (2)) and such other terms as might affect the reasonable evaluation of the terms
determined in accordance with sub-paragraph (a).

2. The reference in paragraph (1)(a)(ii) to transportation adjustments is a
reference to -
(a) where the relevant shipper would be required by the relevant transporter to pay supplemental
charges (within the meaning of condition 6 of the Standard Conditions of Public Gas
Transporters Licences) in respect of particular premises in a designated area (within the
meaning of that condition), an addition to the charges made in the case of those premises
which equals those supplemental charges;
(b) where, in relation to particular premises, the relevant transporter is not (subject to paragraph
(5)) BG plc and the aggregate of the charges made by the relevant transporter and the
relevant charges made by BG plc in respect of the conveyance of the gas supplied to the
premises exceeds the relevant charges made by BG plc in respect of the conveyance of gas to
comparable premises, an addition to the charges made in the case of those premises which
equals that excess, and
(c) where, in relation to particular premises, the relevant transporter is not (subject to paragraph
(5)) BG plc and the relevant charges made by BG plc in respect of the conveyance of gas to
comparable premises exceed the aggregate of the charges made by the relevant transporter
and the relevant charges made by BG plc in respect of the conveyance of the gas supplied to
the premises, a reduction in the charges made in the case of those premises which equals that
excess;
and, for the purposes of sub-paragraphs (b) and (c), relevant charges means so much of the
charges in respect of the conveyance of gas as depend upon where it is taken out of the
transporters pipe-line system and comparable premises means premises at which the
reasonably expected consumption of gas is similar to that at the particular premises in question
and which are situated in the same area of Great Britain as those premises.

3. The terms of contract to supply gas to a domestic customer shall be agreed between the licensee
and the customer and, that subject to paragraphs (4) and (5), the licensee shall ensure that those
terms are in conformity with those for the time being determined under sub-paragraph (1)(a);

4. Where the licensee proposes, in pursuance of a single contract, to supply to a domestic customer
both gas and other goods or services relating to the supply or use of gas -
(a) excluding -
(i) the provision of a meter, of any device or facilities designated by the Director for the
purposes hereof as serving the like purposes as a pre-payment meter or of pre-payment
facilities, and
(ii) any related services or services in respect of the reading of a meter, and
(b) including, in particular, the provision of a service pipe or the provision of goods or services
designed or calculated to promote the efficient use of energy,
the licensee shall ensure that the contract identifies, separately, the charges to be made for the
supply of gas, for other goods sold, for other goods provided on hire and for services.

5. If the whole or a significant part of the pipe-line system operated by BG plc on the appointed day
comes to be operated by another public gas transporter (the relevant system) and that
transporter (not being the relevant transporter) conveys by means of the relevant system the gas
that is subsequently conveyed to particular premises by the relevant transporter then, in relation to
those premises (or to any secondary sub-deduct premises in relation to which those premises are
relevant primary sub-deduct premises), any reference in sub-paragraphs (2)(b) or (c) to BG plc
shall have effect as if it were a reference to that other transporter; and the Director shall determine
any question arising under this paragraph as to whether a part of the pipe-line system operated by
BG plc on the appointed day is a significant part thereof.

Condition 3AA: Security Deposits

1. Except where the Director otherwise consents, the Licencee shall not, in respect of the supply of gas to any
domestic customer, 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 such a domestic customer may be 11/2 times the value of the average quarterly
consumption of gas reasonably expected at the relevant premises, or more if that is reasonable in all the
circumstances.

3. Where the licensee requires a deposit of such a domestic 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 for more than a month, it shall pay the customer simple interest on the
deposit at the rate which is from time to time equivalent to the base rate of Barclays Bank PLC or, if
there is no such base rate, less than such base rate as the Director may designate of the purposes hereof.

5. Subject to paragraph (6), any deposit given by a domestic 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 gas supplied
within 28 days of each written demand made; or

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 gas 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 domestic 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.

8. Paragraphs (9) and (10) shall apply where one gas supplier (the transferor), with the agreement of another
gas supplier (the transferee) assigns to that other supplier its rights and liabilities under contracts for
the supply of gas to particular domestic customers whose contracts allow of such assignment (an
assignment and the transferred customers).

9. Where this paragraph applies and the licensee is the transferor, if it so elects, paragraph (6)(b) shall not
have effect in relation to a deposit on the licensee ceasing to supply a transferred customer by reason of
an assignment but it shall pass the deposit to the transferee, together with interest thereon calculated as
provided in paragraph (6)(c).

10. Where this paragraph applies and the licensee is the transferee, paragraph (6) shall have effect, in relation to
any deposit passed to it by the transferee, as if the transferee were the same person in law as the
transferor.

11. For the purposes of this condition, any reference to a deposit is, except where the context otherwise
requires, a reference to so much of the deposit as, from time to time, has not been applied to meet
charges in respect of the supply of gas.

12. Notwithstanding the definition of the expression deposit by way of security for the payment of charges in
standard condition 1(1), the provisions contained in this condition shall not apply in relation to a
payment which is not a deposit; but, in relation to a payment of any class or description which serves
the like purpose as a deposit by way of security for the payment of charges, this condition shall have
effect as if they contained such provisions, if any, as are designated by the Director, for the purposes of
this condition generally, as having, in the case of payments of that class or description, as nearly as may
be and having regard to their nature, an effect corresponding to that of the said paragraphs in their
application in relation to deposits.

Consequential Changes to Gas Standard Conditions 4 and 7.

In paragraph 7 of Standard Condition 4 delete the words (3)(b) and (c) and (7) from that paragraph. That sub-
paragraph now reads -

Standard condition 4(7)

Subject to any necessary modifications, standard condition 3(1)(a)(iv) and 3AA (1) shall apply in relation to a
deemed contract for the supply of gas to a domestic customer as it applies to a contract for such supply
In sub-paragraph (2)(d) of Standard Condition 7 replace the words standard condition 3(3)(b)
and (c) with the words standard condition 3AA(1). That sub-paragraph now reads -

Standard Condition 7(2)(d)

the licensee shall not be required by standard condition 2, to supply gas[where]

(d) subject to standard condition 3AA(1), and except where the licensee is required to supply gas by standard
condition 5, that the licensee has requested a deposit by way of security for the payment of charges and the
customer concerned has not paid this;

Condition 10: Methods for Payment of Gas Charges

1. Where the licensee offers to supply gas to domestic customers under a contract, it shall have available
forms of contract which provide for the payment of charges for gas:

(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 twice-monthly or fortnightly or more regularly, such sums as agreed;
(ii) paying monthly a predetermined sum; and
(iii) paying quarterly in arrears.
2. Except for the terms of deemed contracts made following a last resort direction
under standard condition 5, the terms contained in the licensees scheme under
paragraph 8 of Schedule 2B to the Act, shall include terms in respect of all the ways
of making payments mentioned in sub-paragraph (1)(b) and the frequencies
mentioned in sub-paragraph (1)(c).

Condition 15: 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
standard conditions 16, 17, 18, 18A and 19 of this Licence.
2. In first preparing such a code the licensee shall, prior to submitting that code to the Director, consult
the Gas Consumers Council and shall have regard to any representations made by it 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 Gas Consumers Council 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 Gas Consumers
Council 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.
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 Gas Consumers Council a copy of such code or such revision (in each
case in the form approved by the Director);
(b) at least once in each year, 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 above procedures.
9. The licensee shall ensure, so far as reasonably practicable, that in its dealings with any customer to
whom any code applies 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.

Condition 16: Efficient Use of Gas

1. The licensee shall, no later than 1 September 2000 , 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 its domestic customers
such guidance on the efficient use of gas, in each case given or prepared by a suitably qualified person, as
will, in the opinion of the licensee enable such customers to make informed judgments on measures to
improve the efficiency with which they use the gas supplied to them.
2. The code of practice shall include, but shall not be limited to:
(a) the preparation and making available free of charge to any domestic 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 gas supplied to them;
(b) the making of arrangements for maintaining sources from which domestic customers may obtain
further information about the efficient use of gas supplied to them, including the maintenance of a
telephone information service; and
(c) the preparation and making available free of charge to any domestic customer who requests it of a
statement or statements of sources (to the extent that the licensee is aware of the same) outside the
licensees organisation from which such customers may obtain additional information or
assistance about measures to improve the efficiency with which they use the gas 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.
3. 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 its domestic customers information on the efficient use of gas
supplied to them; and
(c) send to each domestic customer a copy of any information published by the Director in relation to
the efficient use of gas pursuant to section 35 of the Act
in such manner and at such times as will comply with those directions.
4. This condition is subject to the provisions of standard condition 15.

Condition 17: Provision of Services for Persons who are of Pensionable Age or Disabled or
Chronically Sick

1. The licensee shall, no later than 1 September 2000 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. The code of practice shall include
arrangements by which the licensee will, on request of such customers, and in each case free of charge:
(a) except in the case of a customer living with another person who is neither a pensioner nor a
disabled or chronically sick person nor under 18 years of age, provide for the examination by a
person possessing appropriate expertise at intervals of not less than 12 months of the safety of
gas appliances and other gas fittings on the customers side of the meter at his premises, other
than a fitting for the annual inspection of which a landlord of the customer is responsible in
pursuance of regulations made under the Health and Safety at Work etc. Act 1974;
(b) where reasonably practicable and appropriate:
(i) provide special controls and adaptors for gas appliances and meters (including
prepayment meters) owned by the licensee or the relevant transporter;
(ii) reposition meters; and
(iii) provide for the transmission through the relevant shipper (or, if the holder of this
Licence is that shipper, direct) to the relevant transporter of any request by the
customer for the relevant transporter to reposition any gas meter it owns to meet such
needs and (except where the holder of this Licence is the relevant shipper) for the
relevant shipper to be reimbursed by the licensee any payments made by it in respect
of any reasonable expenses incurred by the relevant transporter in complying with the
request);
(iv) provide special means of identifying persons acting on behalf of the licensee;
(v) give advice on the use of gas, gas appliances and other gas fittings;
(vi) send bills in respect of the supply of gas 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); and
(vii) provide, where neither the customer nor anyone living with him is able to read the gas
meter, for the meter to be read once in each quarter and, without prejudice to Standard
Condition 26 (2), for the customer to be informed of the readings so obtained.
2. The code of practice shall further include arrangements whereby the licensee will:
(a) establish a list (the Priority Service Register) of customers who, by virtue of being of
pensionable age or disabled or chronically sick, require information and advice in respect of the
matters set out at paragraph (1);
(b) notify its customers at least once each year of the existence of the Priority Service Register and of
how they may be included on it;
(c) maintain the Priority Service Register, comprising the relevant details of each customer who
requests his inclusion on it and where requested, give to those of its own customers so registered,
in respect of the matters set out at paragraph (1), such information and advice as may be
appropriate and is of such nature as shall be set out in the code of practice; and
(d) secure that the relevant transporter is provided with the information in the Priority Service Register
in an appropriate form and at appropriate intervals.
3. This condition is subject to the provisions of standard condition 15.

Condition 18: Provision of Services for Persons who are Blind or Deaf

1. The licensee shall, no later than 1 September2000, prepare and submit to the Director for his approval a
code of practice detailing the special services the licensee will make available for its domestic customers
who are disabled by virtue of being blind or partially sighted, or deaf or hearing impaired.
2. The code of practice shall include arrangements by which the licensee will, on request, in each case free of
charge:
(a) make available to its blind and partially sighted customers, by telephone or other appropriate
means, information concerning the details of any bill relating to the supply of gas to them and a
facility for enquiring or complaining in respect of any such bill or any service provided by the
licensee; and
(b) make available to its 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 gas to them or any service provided by the licensee.
3. This condition is subject to the provisions of standard condition 15.

Condition 18A: Code of Practice on the use of Prepayment Meters

1. The licensee shall, no later than 1 September 2000, prepare and submit to the Director for his approval a
code of practice concerning the use of prepayment meters by its domestic customers, including appropriate
guidance for the assistance of its prepayment meter customers who wish to take a supply of gas on other
terms.

2. The code of practice shall set out the licensees policy on the installation of prepayment meters and
shall include procedures by which the licensee will where appropriate:

(a) provide general information for customers on the operation, usefulness, advantages and
disadvantages of prepayment meters, including details of:

(i) token outlets and card or key charging facilities within the areas supplied with gas by
the licensee;

(ii) the actions available to customers on the malfunction of a prepayment meter or a
prepayment card or key; and

(iii) any standards of performance (and associated payments) applying to the licensee in
relation to premises supplied by it through prepayment meters;

(b) arrange for the calibration of any prepayment meter provided in accordance with sub-paragraph
(1)(f) of standard condition 19 so as to take into account, having due regard to all information
available to the licensee (including any information provided by other persons or organisations),
the relevant customers ability to pay any charges due from him under the arrangements
contemplated by that condition in addition to the other charges lawfully being recovered through
the prepayment meter;

(i) in the case of an individual customer, at the conclusion of any such arrangements
applying to that customer; and

(ii) generally, following changes in the price at which the licensee supplies gas to
prepayment meter customers; and

(d) remove prepayment meters, setting out the timescale and conditions under which such removal
might take place.

3. This condition is subject to the provisions of standard condition 15.

Condition 19: Code of Practice on Payment of Bills and Guidance for Dealing with Customers in
Difficulty

1. The licensee shall, no later than 1 September 2000, prepare and submit to the Director for his approval a
code of practice concerning the payment of gas charges by its domestic customers, including appropriate
guidance for the assistance of such customers who, through misfortune or inability to cope with gas
supplied on credit terms, may have difficulty in paying such bills. The code of practice shall include
procedures by which the licensee can distinguish, so far as is reasonably practicable, 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 gas;
(b) where such a facility is available, accept in payment for gas 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 gas supplied;
(d) make such arrangements so as to take into account the customers ability to comply with them;
(e) ascertain, with the assistance of any information provided by other persons or organisations, the
ability of customers to comply with such arrangements; and
(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).
2. In the case of a relevant customer, the licensee shall not cut off the supply of gas at such a customers
premises for non-payment of charges otherwise than following compliance by the licensee with such
procedures referred to in paragraph (1) above.
3. In formulating the procedures for the Code of Practice referred to at paragraph 1 the Licensee shall have
particular regard to the interests of relevant customers who are of pensionable age (except those pensioners
who fall within the description set out in Condition 20 (1) (a)) 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
purpose.
4. This condition is subject to the provisions of standard condition 15.

Condition 20: Pensioners not to have Supply of Gas cut off in Winter

1. This condition shall apply in the case of any of the licensees domestic customers who, to the
knowledge or reasonable belief of the licensee -
(a) is of pensionable age and lives alone or with other persons all of whom are also of
pensionable age or under 18 years of age;
(b) is supplied with gas which is used for domestic purposes, and
(c) is in default of his obligation to pay for gas so supplied through misfortune or inability to
budget to meet bills for gas supplied on credit terms.
2. Notwithstanding that sub-paragraph (3) of paragraph 7 of Schedule 2B to the Act (including that
sub-paragraph as extended by sub-paragraph (4) thereof) applies by virtue of sub-paragraph (1) of
the said paragraph 7 (or would so apply but for the fact that the premises in question are
secondary sub-deduct premises), and notwithstanding the provisions of standard condition 7(2)(f),
the licensee shall not under the said sub-paragraph (3) or (in the case of secondary sub-deduct
premises) in exercise of any analogous right cut off the supply of gas to such a customers
premises during any winter period, that is to say, a period beginning with 1st October in any year
and ending with 31st March in the next following year.

Note: This condition is unchanged, but is included for information.

Condition 21: Record of and Report on Performance

1. The licensee shall keep a record of its general operation of the arrangements mentioned in
standard conditions 16, 17, 18, 18A, 19 and its compliance with standard conditions 19(2)
and 20, 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 its performance in relation to the provision of
gas supply services to its domestic customers.
3. The licensee shall, from time to time as required by the Director,
provide to the Director and to the Gas Consumers Council 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 Gas Consumers Council 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 (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.
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.

NOTICE UNDER SECTION 11(2) OF THE ELECTRICITY ACT 1989

The Director General of Electricity Supply (the Director) pursuant to section 11 of the Electricity Act 1989
(the Act) hereby gives notice as follows :

(i) In relation to each of the licences which have been granted under section
6(1)(c) of the Act in respect of an authorised area in England and Wales
(hereinafter a PES licence), he proposes to make modifications as follows :

- - In relation to the PES licences issued to: Eastern Electricity plc, Manweb plc,
Northern Electricity plc, PowerGen plc, Norweb plc, Seeboard plc, Southern
Electric plc and Yorkshire Electricity Group plc, he proposes to make
modifications to Conditions 3, 3A, 3B, 3D, 3E, 3G and Schedule 3 (being
part of the charge restriction conditions as defined in a PES licence);

- - In relation to the PES licences issued to: London Electricity plc, Midlands
Electricity plc, South Wales Electricity plc and South Western Electricity plc,
he proposes to make modifications to Conditions 3A, 3B, 3C, 3E, 29A, 29B,
29C, 29E and Schedules 3A and 3B (being part of the charge restriction
conditions as defined in a PES licence);

- - In relation to the PES licences issued to: Eastern Electricity plc, Manweb plc,
Northern Electricity plc, PowerGen plc, Norweb plc, Seeboard plc, Southern
Electric plc and Yorkshire Electricity Group plc, he proposes to make
modifications to Conditions 1 and 11D, to delete Condition 12, and to add
new Conditions 12, 12A and 12B; and

- - In relation to the PES licences issued to: London Electricity plc, Midlands Electricity plc, South
Wales Electricity plc and South Western Electricity plc, he proposes to make modifications to
Conditions 1, 5, 5A, 5B, 5D, 14, 35, 35A, 35B and 35D and to add a new Condition 35E.

(ii) The reasons why he proposes to make the modifications and their effect were published by the Director
in three documents: the December 1999 document Review of Public Electricity Suppliers 1998 to 2000
Distribution Price Control Review Final Proposals (which set out proposals for the price control regime
to apply to PES distribution businesses over the next five years); the December 1999 document Review
of Public Electricity Suppliers 1998 to 2000 Supply Price Control Review Final Proposals (which set out
proposals to restrict the maximum prices charged by PESs for their two main domestic tariffs); and the
October 1999 document Review of Public Electricity Suppliers 1998 to 2000 Distribution Price Control
Review (which confirmed the separation proposals for the distribution business).

(iii) In summary the effect of the licence modifications relevant to PES distribution businesses will be to
amend the charge restriction conditions so that :

- - for the year commencing 1 April 2000, allowed revenue must fall, in comparison with allowed
revenue for the year commencing 1 April 1999, by the following percentage in real terms: being 28%
for Eastern Electricity plc, 23% for East Midlands Electricity plc, 27% for London Electricity plc,
21% for Manweb plc, 23% for Midlands Electricity plc, 23% for Northern Electric plc, 27% for
Norweb plc, 33% for Seeboard plc, 19% for Southern Electric plc, 26% for South Wales Electricity
plc, 20% for South Western Electricity plc, 22% for Yorkshire Electricity Group plc;

- - for subsequent years, the calculation of the maximum average charge per unit distributed shall
contain an X value of 3% per year in real terms;

- - from 1 April 2000 the maximum average charge per unit distributed shall fall to reflect the reduction
in relevant costs, excluding those of a non-recurring nature, due to the provision of meter provision
services and meter operation services by persons other than the Licensee, to customers who took
meter provision services and meter operation services from the Licensee at 31 March 2000;

- - the DMS set up costs allowance shall be extended for a further two years, from 2002/03 to 2004/05;

- - from 1 April 2000 the amount of excluded service revenue receivable in
respect of domestic customers using prepayment meters shall be capped in
nominal terms at (POUNDS)15 per year per customer for customers in PES
authorised areas other than Eastern. In Easterns authorised area, the
maximum will be (POUNDS)11.22 per customer per year; and

- - from 1 April 2000 the amount of excluded service revenue receivable in respect of the transport of
EHV units shall not exceed that assumed by the Director in formulating allowed revenue, subject to
such adjustments as may be appropriate.

(iv) In summary the effect of the licence modifications relevant to PES supply businesses will be to amend
the charge restriction conditions so that from 1 April 2000 :

- - the control of charges for the supply of electricity will apply only to two tariffs in each PES area, the
Standard Domestic and Domestic Economy 7 tariffs (together the Restricted Tariffs), and to the
prepayment meter surcharge as described below;

- - PESs shall be obliged to continue to offer these tariffs to all domestic customers;

- - the maximum average price to be charged for the Restricted Tariffs shall be calculated by reference to
the sum of a base allowance for generation, supply business and certain transmission costs, and
relevant published charges for distribution and transmission use of system costs, the fossil fuel levy,
and an allowed margin on turnover of 1.5 per cent;

- - the maximum surcharge to be applied to domestic customers using prepayment meters will be capped
at (POUNDS)15 per customer per year for customers in PES authorised areas other than of Eastern Electricity
plc. In Easterns authorised area, the maximum will be (POUNDS)11.22 per customer per year; and

- - PESs shall be obliged to provide statements to the Director summarising the costs of purchasing
electricity.

(v) In summary the effect of the licence modifications relevant to the separation of the PES distribution from
the PES supply businesses will be :

- - that information relating to the PES distribution business is kept confidential (except in clearly
defined circumstances) and to effect full managerial and operational independence of the PES
distribution business from the PES supply business;

- - that the PES will appoint a compliance officer to monitor the separation process and to ensure
separation is effected;
- - that metering services presently provided by the PES are split between the PES supply and PES
distribution businesses so that each PES distribution business will be obliged to provide and operate
meters on request. Each PES supply business must provide, on a non-discriminatory basis, meter
reading, data processing and data aggregation on request to suppliers operating in its area.
- - that access by the PES supply business to confidential information, which accrues from compliance
with metering obligations and which is about the businesses of other suppliers, is restricted.

Copies of the proposals documents and of the proposed licence modifications can be
obtained (free of charge) from Ofgems library at the address below.

Any representations or objections to the proposed modifications may be made on or before
27 March 2000 to the Director, Ofgem, Stockley House, 130 Wilton Road, London, SW1V
1LQ.

Tony Boorman
Authorised on behalf of the Director
25 February 2000

Schedule of licence modifications

For Eastern, East Midlands, Manweb, Northern, Norweb, Seeboard, Southern,
Yorkshire

1. Delete Condition 3A and replace with new Condition 3A in the terms set out
in Annex A.

2. Delete Condition 3B and replace with new Condition 3B in the terms set out
in Annex B.

3. In the heading to Condition 3D, delete and of supply charges

4. In Condition 3D :

(a) in paragraph 3, replace paragraph 1 in each place where it occurs with paragraph 6;

(b) delete paragraphs 4.1 to 4.3; and

5. In Condition 3E :

(a) delete the title and replace it with Information to be provided to the
Director in connection with the distribution charge restriction conditions ;

(b) delete paragraph 2 and replace it with [No longer used] ;

(d) delete paragraph 6 and replace with [No longer used];

(e) delete paragraph 8 (b) (ii);

(f) delete paragraph 8 (b) (vi);

(g) delete paragraph 9(e) and insert in its place the value of the term TAdt in respect of the tenth relevant
year only, together with the value of each of its component parts as detailed in paragraph 4 of
Condition 3A in the form of the licence in force on 31 March 2000;

(h) delete paragraph 9 (h) and the proviso which follows it.

6. In Condition 3G :

(a) in paragraph 3 (b) replace 2000 with 2005; and

(b) in paragraph 3 (c) replace 2000 with 2002

7. In Schedule 3 Part A :

(a) in paragraph A6 delete 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 2 of Condition 3E, and

8. In Schedule 3 Part C :

(a) in paragraph C2 delete paragraph 3 of Condition 8 and replace with
paragraph 4 of Condition 8 ; and

(b) delete paragraph C3 (b) and replace with EHV units, provided that the
Licensees charges for the distribution of such units do not exceed the
charging rates underlying the information as to EHV revenue and EHV units
distributed given by the Licensee to the Director and used by him for the
purposes of setting the term PUM in Condition 3A, subject only to such
adjustments as may be appropriate in the reasonable opinion of the
Director to reflect material variations between the actual charges made and
the charging rates underlying the information as to EHV revenue provided
to the Director by the Licensee ; and

(c) delete paragraph C5 (iv) and replace with the amount by which charges for the provision of
prepayment meters to customers exceed charges for the provision of standard meters for such
customers, in respect of which the amount receivable per customer shall not exceed that used by the
Director in formulating PUM in Condition 3A; and

9. In Schedule 3 Part E

(a) delete paragraph E1 and replace with The terms ALt and Lt ,which are used in paragraph 3 of
Condition 3A, shall each be determined, for relevant years commencing on or after 1 April 1995,
using the consistent methodological basis set out in paragraphs E2 to E5 below. ; and

(b) in paragraph E2 delete determined as being and replace with deemed to be ; and

(d) in paragraph E6 delete determined as being and replace with deemed to be.

10. In each place where they occur in the Conditions, the words
Monopolies Commission shall be modified to read Competition
Commission.

Schedule of licence modifications

For London, MEB, SWALEC, SWEB

1. Delete Condition 3A and replace it with the new Condition 3A in the terms set out in Annex A but
subject to the following amendments to the wording of Annex A;

(a) in paragraph 3, in respect of the meaning of the term ALt , the references to Schedule 3 shall be
replaced by references to Schedule 3A; and

(b) in paragraph 3, in respect of the meaning of the term Lt , the references to Schedule 3 shall be
replaced by references to Schedule 3A; and

(c) in paragraph 5, in respect of the meaning of the term RMdt , the reference to paragraph 1 of
Condition 11C shall be replaced by a reference to paragraph 3 of Condition 5B ; and

(d) in paragraph 6, the reference to paragraph 3 of Condition 3D shall be replaced by a reference to
paragraph 3 of Condition 3B.

2. In Condition 3B :

(a) in paragraph 3, replace the reference to paragraph 1 and paragraph 5 in the places where they
appear, with a reference to paragraph 6

3. In Condition 3C :

(a) delete paragraph 6 and replace with [No longer used];

(b) delete paragraph 9(e) and insert in its place the value of the term TAdt in respect of the tenth relevant
year only, together with the value of each of its component parts as detailed in paragraph 4 of
Condition 3A in the form of the licence in force on 31 March 2000.

4. In Condition 3E :

(a) in paragraph 3(b) replace 2000 with 2005

5. In Schedule 3A Part C :

(a) delete paragraph C3 (b) and replace with EHV units, provided that the
Licensees charges for the distribution of such units do not exceed the
charging rates underlying the information as to EHV revenue and EHV units
distributed given by the Licensee to the Director and used by him for the
purposes of setting the term PUM in Condition 3A, subject only to such
adjustments as may be appropriate in the reasonable opinion of the
Director to reflect material variations between the actual charges made and
the charging rates underlying the information as to EHV revenue provided
to the Director by the Licensee ; and

(b) delete paragraph C5 (iv) and replace with the amount by which charges for the provision of
prepayment meters to customers exceed charges for the provision of standard meters for such
customers, in respect of which the amount receivable per customer shall not exceed that used by the
Director in formulating PUM in Condition 3A; and

6. In Schedule 3A Part E :

(a) delete paragraph E1 and replace it with The terms ALt and Lt ,which are used in paragraph 3 of
Condition 3A, shall each be determined, for relevant years commencing on or after 1 April 1995,
using the consistent methodological basis set out in paragraphs E2 to E5 below.;

(b) in paragraph E2 delete determined as being and replace with deemed to be;

(d) in paragraph E6 delete determined as being and replace with deemed to be

7. Delete Condition 29A and replace it with new condition 29A as in the terms set out in Annex B but
subject to the following amendments to the wording of Annex B;

(a) Replace the title Condition 3B : Restraints on supply charges with Condition 29A : Restraints on
supply charges

(b) in paragraphs 3, 4, 5, 10, 12, and 15, the references to condition 3F shall be replaced by references
to condition 3D

8. Delete Condition 29B and replace it with [No longer used]

9. In Condition 29C :

(a) delete paragraph 1 and replace it with [No longer used] ;

(b) delete paragraph 2 and replace it with [No longer used] ;

(d) delete paragraph 4(b)(v) and replace it with [No longer used] ; and

(e) delete paragraph 5(c) and the proviso which follows it.

10. In Condition 29E :

(a) in paragraph 3(b) replace 2000 with 2002

11. In Schedule 3B Part A :

(a) in paragraph A4 delete 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

12. In each place where they occur in the Conditions, the words Monopolies Commission shall be
modified to read Competition Commission.
ANNEX A
Condition 3A. Restriction of distribution charges
Basic Formula
1. Without prejudice to Condition 3F, 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:

2. For the purposes of paragraph 1, Mdt means the maximum average charge per unit distributed in relevant
year t.
Formula for Pdt as used in paragraph 1
3. For the purposes of paragraph 1, Pdt is derived from the following formula:
Pdt = (PUM. GRt.PIDt) + (PL.(ALt-Lt).PILt)
Dt
where:
PUM means the amount set against that term in the part of Annex A to this Condition
that applies to the Licensee.

GRt in the eleventh relevant year has the value of 1 and in each subsequent relevant
year is derived from the following formula:
where
? means the summation across all regulated distribution unit categories i as
described in the definition of the term Poi.
Poi 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 which
applies to the Licensee, the value opposite that category in column 2.
Dit means that number of units in each regulated distribution unit category i
distributed in relevant year t.
Dit-1 means that number of units in each regulated distribution unit category i
distributed in relevant year t-1.
Cdt means a notional figure, representing the number of customers in the
authorised area (for the purpose of this term Cdt 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.
Cdt-1 means the number equal to Cdt in relevant year t-1.
PIDt in the eleventh relevant year has the value of 1 and in each subsequent relevant
year is derived from the following formula:

where
RPIt 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.
Xdt shall equal 3.
PL means an amount equal to 2.9p.
ALt 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 3) where, in
respect of 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 3) over the 10 preceding
relevant years bears to the aggregate of adjusted units distributed (calculated as
aforesaid) over the corresponding relevant years
Lt 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 3).
PILt is derived from the following formula:

where, for the eleventh relevant year, PILt-1 equals 1.
Dt means the regulated quantity distributed in relevant year t.
Formula for PNdt as used in paragraph 1
4. For the purposes of Paragraph 1, in the eleventh and subsequent relevant years the term PNdt shall be
calculated in accordance with the following formula:

where:
PS means an amount equal to (POUNDS)3.25 million for each of the eleventh to the fifteenth
relevant years, and thereafter shall be 0.
PR means, in the eleventh and all subsequent relevant years, the amount given
against the Licensees name in Annex B to this Condition.
PIRt is derived from the following formula:

where for the ninth relevant year PIRt-1 equals 1
Formula for PMdt as used in Paragraph 1
5. For the purposes of paragraph 1, PMdt is derived from the following formula:

where:
RMdt means an amount equal to the Licensees relevant reduction in costs in
relevant year t, resulting from the fact that the Licensee has ceased to
provide meter provision services and meter operation services (as defined
in paragraph 1 of Condition 11C) in respect of customers in respect of
whom it provided meter provision services and meter operation services at
31 March 2000. The Licensees relevant reduction in costs shall be
calculated in real terms, and shall be the amount, if any, by which the
Licensees cash operating costs (excluding costs of a non-recurring nature)
of providing such services in the relevant year t fall short of its cash
operating costs (excluding costs of a non-recurring nature) of providing
such services in the tenth relevant year, to the extent that such shortfall is
attributable to the fact that the Licensee has ceased, since 31 March 2000,
to provide (whether directly or through an agent acting on its behalf) meter
provision services and meter operation services in respect of such
customers. The Licensees relevant reduction in costs shall exclude the
amount of any reduction in costs in providing any services which constitute
excluded services.

Formula for Kdt as used in Paragraph 1
6. For the purposes of paragraph 1, Kdt means the correction factor per unit (whether of a positive or a
negative value) derived, subject to paragraph 3 of Condition 3D, from the following formula: provided that
the value of Kdt for the eleventh relevant year shall be the value of Kdt arising for that year from the
application of the formula applicable under Condition 3A of this licence in the form of that condition in
force on 31 March 2000, but adjusted by adding the amount of TAdt for the tenth relevant year,
calculated by the application of the formula applicable under Condition 3A of this licence as then in
force:

where:
Rdt-1 means the distribution revenue in relevant year t-1.
Dt-1 means the regulated quantity distributed in relevant year t-1.
Mdt-1 means maximum average charge per unit distributed in relevant year t-1.
Idt 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.
7. In this Condition, any term defined for the purposes of paragraph 1 shall have the same meaning in all
paragraphs of this Condition.

ANNEX A to Condition 3A
Distribution values specific to individual companies
EASTERN ELECTRICITY plc
(POUNDS)m
PUM 287.9

Cdt for relevant year beginning on
000s
1 April 2000 3249
1 April 2001 3281
1 April 2002 3314
1 April 2003 3347
1 April 2004 3381
every subsequent relevant year 3415

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.0009
LV2 0.3031
LV3 1.3431
HV 0.4584
EAST MIDLANDS ELECTRICITY plc
(POUNDS)m
PUM 240.3

Cdt for relevant year beginning on
000s
1 April 2002 2376
1 April 2001 2400
1 April 2002 2424
1 April 2003 2448
1 April 2004 2472
every subsequent relevant year 2497

P0i
Column 1 Column 2
unit category i value (p)
LV1 1.6131
LV2 0.5557
LV3 1.5711
HV 0.6350

LONDON ELECTRICITY plc
(POUNDS)m
PUM 220.8

Cdt for relevant year beginning on
000s
1 April 2000 2072
1 April 2001 2093
1 April 2002 2114
1 April 2003 2135
1 April 2004 2156
every subsequent relevant year 2178

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.2073
LV2 0.4057
LV3 1.5912
HV 0.5932

MANWEB plc
(POUNDS)m
PUM 158.0

Cdt for relevant year beginning on
000s
1 April 2000 1423
1 April 2001 1437
1 April 2002 1452
1 April 2003 1466
1 April 2004 1481
every subsequent relevant year 1496

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.1041
LV2 0.4323
LV3 1.7558
HV 0.5097

MIDLANDS ELECTRICITY plc
(POUNDS)m
PUM 243.5

Cdt for relevant year beginning on
000s
1 April 2000 2303
1 April 2001 2326
1 April 2002 2349
1 April 2003 2373
1 April 2004 2397
every subsequent relevant year 2420

P0i
Column 1 Column 2
unit category i value (p)
LV1 1.9729
LV2 0.3966
LV3 1.6108
HV 0.5992

NORTHERN ELECTRIC plc
(POUNDS)m
PUM 152.6

Cdt for relevant year beginning on
000s
1 April 2000 1500
1 April 2001 1515
1 April 2002 1530
1 April 2003 1545
1 April 2004 1561
every subsequent relevant year 1577

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.0911
LV2 0.3273
LV3 1.9284
HV 0.4723

NORWEB plc
(POUNDS)m
PUM 208.9

Cdt for relevant year beginning on
000s
1 April 2000 2250
1 April 2001 2272
1 April 2002 2295
1 April 2003 2318
1 April 2004 2341
every subsequent relevant year 2365

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.1750
LV2 0.2821
LV3 1.6304
HV 0.5335

SEEBOARD plc
(POUNDS)m
PUM 159.1

Cdt for relevant year beginning on
000s
1 April 2000 2153
1 April 2001 2175
1 April 2002 2196
1 April 2003 2218
1 April 2004 2240
every subsequent relevant year 2263

P0i
Column 1 Column 2
unit category i value (p)
LV1 1.8735
LV2 0.3213
LV3 1.4098
HV 0.5892

SOUTHERN ELECTRIC plc
(POUNDS)m
PUM 297.7

Cdt for relevant year beginning on
000s
1 April 2000 2728
1 April 2001 2755
1 April 2002 2783
1 April 2003 2811
1 April 2004 2839
every subsequent relevant year 2867

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.0600
LV2 0.3816
LV3 1.4815
HV 0.5560

SOUTH WALES ELECTRICITY plc
(POUNDS)m
PUM 125.6

Cdt for relevant year beginning on
000s
1 April 2000 998
1 April 2001 1008
1 April 2002 1018
1 April 2003 1028
1 April 2004 1039
every subsequent relevant year 1049

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.4442
LV2 0.3641
LV3 2.2009
HV 0.7272

SOUTH WESTERN ELECTRICITY plc
(POUNDS)m
PUM 171.0

Cdt for relevant year beginning on
000s
1 April 2000 1369
1 April 2001 1383
1 April 2002 1397
1 April 2003 1410
1 April 2004 1425
every subsequent relevant year 1439

P0i
Column 1 Column 2
unit category i value (p)
LV1 2.3889
LV2 0.6679
LV3 1.8707
HV 0.5072

YORKSHIRE ELECTRICITY GROUP plc
(POUNDS)m
PUM 215.4

Cdt for relevant year beginning on
000s
1 April 2000 2129
1 April 2001 2150
1 April 2002 2172
1 April 2003 2194
1 April 2004 2215
every subsequent relevant year 2238

P0i
Column 1 Column 2
unit category i value (p)
LV1 1.9497
LV2 0.3271
LV3 1.6654
HV 0.5750

ANNEX B to Condition 3A

Values for paragraph 4 of this Condition

PR (POUNDS)M

EASTERN
2.97
EAST MIDLANDS
2.35
LONDON
2.14
MANWEB
1.69
MIDLANDS
2.34
NORTHERN
1.76
NORWEB
2.28
SEEBOARD
2.15
SOUTHERN
2.64
SWALEC
1.38
SOUTH WESTERN
1.65
YORKSHIRE
2.19
SCOTTISH POWER
2.01
HYDRO-ELECTRIC
1.16

ANNEX B

CONDITION 3B : Restraints on Supply Charges

Availability of Restricted Tariffs

1. The Licensee shall make available and continue to make available to all
Domestic Customers the Standard Domestic Tariff and the Domestic Economy 7
Tariff.

2. 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 Restricted Tariff, 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.

Restraints on Prices for Restricted Tariffs

3. Without prejudice to Condition 3F, and subject to paragraph 16, the Licensee
shall, in addition to complying with paragraphs 10, 11, 12 and (where
appropriate) 13, ensure that at any point in time in the eleventh relevant
year the prices set by the Licensee for the Standard Domestic Tariff and the Domestic
Economy 7 Tariff shall not exceed limits imposed by paragraph 6 and paragraph
8 respectively.

4. Without prejudice to Condition 3F, and subject to paragraph 16, the Licensee
shall, in addition to complying with paragraphs 10 to 15, ensure that at any point
in time in the twelfth relevant year the prices set by the Licensee for the Standard
Domestic Tariff and the Domestic Economy 7 Tariff shall not exceed limits
imposed by paragraph 7 and paragraph 9 respectively.

5. Without prejudice to Condition 3F, and subject to paragraph 16, the Licensee
shall, in addition to complying with paragraphs 12 to 15, ensure that at any point
in time in the thirteenth and subsequent relevant years, the prices set by the
Licensee for the Standard Domestic Tariff and the Domestic Economy 7 Tariff
shall not exceed the limits imposed by paragraph 7 and paragraph 9 respectively,
and the limits imposed by paragraph 15;

where in paragraphs 7, 9, and 15 :

references to the twelfth relevant year are replaced by reference to the relevant
subsequent relevant year

references to t+1 are to be construed as references to the relevant subsequent
relevant year

references to t are to be construed as references to the year preceding the
relevant subsequent relevant year

Restraint on Standard Domestic Tariff

6. The Standard Domestic Tariff shall be set so that at any point in time in the
eleventh relevant year the weighted average unit price of that tariff represented
by the term WPSDt does not exceed the lower of the two formulae given under (a)
and (b) :

(a) ( (BSDt+DSDt+TSDt ) x 1.015 ) x (1+(Ft/100))

(b) WPSDt-1 x ((1+(Ft/100))/(1+(Fd/100))) x (1+(RPIt/100))

Where:

WPSDt is set equal to

(WSD x PSDt ) + ( (1-WSD) x PPPSDt )

WSD means the weighting factor given against the Licensees name in Column 2 of
Annex D to this Condition

PSDt means the average unit price for the Licensees Standard Domestic Tariff
calculated as follows, using the Licensees published rates for that tariff, and
without taking account of any Prompt Payment Discount available under that
tariff :

(Annual Standing Charge + (B1SD x Primary Unit rate) + ((3300-B1SD) x
Secondary Unit rate)) / 3300

B1SD has the value given against the Licensees name in Column 2 of Annex E to this
Condition

PPPSDt means the average unit price for the Licensees Standard Domestic Tariff
calculated as follows, using the Licensees published rates for that tariff, and
after taking account of any Prompt Payment Discount available under that tariff:

(Annual Standing Charge + (B1SD x Primary unit rate) + ((3300-B1SD) x
Secondary unit rate)) / 3300

BSDt means the base allowance, subject to paragraph 16, (in respect of generation,
supply and transmission services use of system) given against the Licensees
name in Column 2 of Annex B to this Condition

DSDt means a sum representing the distribution use of system charges incurred by the
Licensee in the eleventh relevant year in supplying a customer on a Standard
Domestic Tariff, represented by the formula :

( D1SDt + (3300 x D2SDt ) + D3SDt ) / 3300

D1SDt is the distribution use of system charge annual standing charge for supplying that
customer

D2SDt is the distribution use of system charge in respect of each unit consumed by that
customer

D3SDt is the aggregate of all other relevant distribution charges for supplying that
customer

TSDt is calculated in accordance with the following formula, provided that if the
Transmission Company changes the basis upon which it calculates or charges for
transmission network use of system charges, the Director may by direction
amend the formula to produce a value of TSDt such that the Licensee is neither
advantaged nor disadvantaged by the change :

TNUOS x 0.1859 x Loss Adjustment Factor

Where

TNUOS is the transmission network use of system charge (expressed in pence
per kWh) published for the eleventh relevant year and for the zone relevant to the
Licensee, as set out in the statement provided for in condition 10 of the
Transmission Licence.

Loss Adjustment Factor means the factor shown against the
Licensees name in column 2 of Annex C to this Condition

WPSDt-1 is set equal to

(WSD x PSDt-1 ) + ((1-WSD) x PPPSDt-1)

PSDt-1 means the average unit price for the Licensees Standard Domestic Tariff
calculated as follows, using the Licensees published rates for that tariff as at the
end of the tenth relevant year, and without taking account of any Prompt
Payment Discount available under that tariff:

(Annual Standing Charge + (B1SD x Primary Unit rate) + ((3300-B1SD) x
Secondary Unit rate)) / 3300

PPPSDt-1 means the average unit price for the Licensees Standard Domestic Tariff
calculated as follows, using the Licensees published rates for that tariff as at the
end of the tenth relevant year, and after taking account of any Prompt Payment
Discount available under that tariff :

(Annual Standing Charge + (B1SD x Primary unit rate) + ((3300-B1SD) x
Secondary unit rate)) / 3300

7. The Standard Domestic Tariff shall be set so that at any point in time in the
twelfth relevant year the weighted average unit price of that tariff represented by
the term WPSDt+1 does not exceed :

((BSDt+1+DSDt+1+TSDt+1 ) x 1.015) x (1+(Ft+1/100))

Where:

WPSDt+1 is set equal to

(WSD x PSDt+1 ) + ((1-WSD) x PPPSDt+1)

WSD means the weighting factor given against the Licensees name in Column 2 of
Annex D to this Condition

PSDt+1 means the average unit price for the Licensees Standard Domestic Tariff in the
twelfth relevant year, calculated as follows using the Licensees published rates
for that tariff, and without taking account of any Prompt Payment Discount
available under that tariff :

(Annual Standing Charge + (B1SD x Primary Unit rate) + ((3300-B1SD) x
Secondary Unit rate)) / 3300

B1SD has the value given against the Licensees name in Column 2 of Annex E to this
Condition

PPPSDt+1 means the average unit price for the Licensees Standard Domestic Tariff in the
twelfth relevant year, calculated as follows, using the Licensees published rates
for that tariff, and after taking account of any Prompt Payment Discount
available under that tariff :

(Annual Standing Charge + (B1SD x Primary unit rate) + ((3300-B1SD) x
Secondary unit rate)) / 3300

BSDt+1 is set equal to

BSDt x (1+(RPIt+1/100))

DSDt+1 means a sum representing the distribution use of system charges incurred by the
Licensee in the twelfth relevant year in supplying a customer on a Standard
Domestic Tariff, represented by the formula :

( D1SDt+1 + (3300 x D2SDt+1 ) + D3SDt+1 ) / 3300

D1SDt+1 is the distribution use of system charge annual standing charge for supplying that
customer

D2SDt+1 is the distribution use of system charge in respect of each unit consumed by that
customer

D3SDt+1 is the aggregate of all other relevant distribution charges for supplying that
customer

TSDt+1 is calculated in accordance with the following formula, provided that if the
Transmission Company changes the basis upon which it calculates or charges for
transmission network use of system charges, the Director may by direction
amend the formula to produce a value of TSDt+1 such that the Licensee is neither
advantaged nor disadvantaged by the change :

TNUOS x 0.1859 x Loss Adjustment Factor

Where

TNUOS is the transmission network use of system charge (expressed in pence
per kWh) published for the twelfth relevant year and for the zone relevant to the
Licensee, as set out in the statement provided for in Condition 10 of the
Transmission Licence.

Loss Adjustment Factor means the factor shown against the
Licensees name in column 2 of Annex C to this Condition

For the purposes of this paragraph 7, any cross references to it and this Condition
generally the terms BSDt , DSDt , and TSDt shall have the meanings given
respectively, in paragraph 6 above.

Restraint on Domestic Economy 7 tariff

8. The Domestic Economy 7 Tariff shall be set so that at any point in time in the
eleventh relevant year the weighted average unit price of that tariff represented
by the term WPE7t does not exceed the lower of the two formulae given under (a)
and (b) :

(a) ((BE7t+DE7t+TE7t ) x 1.015) x (1+(Ft/100))

(b) WPE7t-1 x ((1+(Ft/100))/(1+(Fd/100))) x (1+(RPIt/100))

Where:

WPE7t is set equal to

(WE7 x PE7t ) + ((1-WE7) x PPPE7t)

WE7 means the weighting factor given against the Licensees name in Column 3 of
Annex D to this Condition

PE7t means the average unit price for the Licensees Domestic Economy 7 Tariff
calculated as follows, using the Licensees published rates for that tariff, and
without taking account of any Prompt Payment Discount available under that
tariff :

(Annual Standing Charge + (B1E7 x Day Primary Unit Rate) + ((3000 - B1E7) x
Day Secondary Unit Rate ) + (3600 x Night Unit Rate)) / 6600

B1E7 has the value given against the Licensees name in Column 3 of Annex E to this
Condition

PPPE7t means the average unit price for the Licensees Domestic Economy 7 Tariff
calculated as follows, using the Licensees published rates for that tariff, and
after taking account of any Prompt Payment Discount available under that tariff
:

((Annual Standing Charge + (B1E7 x Day Primary Unit Rate) + ((3000 - B1E7) x
Day Secondary Unit Rate) + (3600 x Night Unit Rate))) / 6600

BE7t means the base allowance, subject to paragraph 16, (in respect of generation,
supply and transmission services use of system) given against the Licensees
name in Column 3 of Annex B to this Condition

DE7t means a sum representing the distribution use of system charges incurred by the
Licensee in the eleventh relevant year in supplying a customer on a Domestic
Economy 7 Tariff, represented by the formula :

( D1E7t + (3000 x D2E7t ) + (3600 x D3E7t ) + D4E7t ) / 6600

D1E7t is the distribution use of system charge annual standing charge for supplying that
customer

D2E7t is the distribution use of system charge in respect of each day unit consumed by
that customer

D3E7t is the distribution use of system charge in respect of each night unit consumed by
that customer

D4E7t is the aggregate of all other relevant distribution use of system charges for
supplying that customer

TE7t is calculated in accordance with the following formula, provided that if the
Transmission Company changes the basis upon which it calculates or charges for
transmission network use of system charges, the Director may by direction
amend the formula to produce a value of TE7t such that the Licensee is neither
advantaged nor disadvantaged by the change :

TNUOS x 0.1162 x Loss Adjustment Factor

where

Loss Adjustment Factor means the factor shown against the
Licensees name in column 3 of Annex C to this Condition

WPE7t-1 is set equal to

(WE7 x PE7t-1 ) + ((1-WE7) x PPPE7t-1)

PE7t-1 means the average unit price for the Licensees Domestic Economy 7 Tariff
calculated as follows, using the Licensees published rates for that tariff as at the
end of the tenth relevant year, and without taking account of any Prompt
Payment Discount available under that tariff :

(Annual Standing Charge + (B1E7 x Day Primary Unit Rate) + ((3000 - B1E7) x
Day Secondary Unit Rate) + (3600 x Night Unit Rate)) / 6600

B1E7 has the value given against the Licensees name in Column 3 of Annex E

PPPE7t-1 means the average unit price for the Licensees Domestic Economy 7 Tariff
calculated as follows, using the Licensees published rates for that tariff at the
end of the tenth relevant year, and after taking account of any Prompt Payment
Discount available under that tariff :

(Annual Standing Charge + (B1E7 x Day Primary Unit Rate) + ((3000 - B1E7) x
Day Secondary Unit Rate) + (3600 x Night Unit Rate)) / 6600

9. The Domestic Economy 7 Tariff shall be set so that at any point in time in the
twelfth relevant year the weighted average unit price of that tariff represented by
the term WPE7t+1 does not exceed :

((BE7t+1+DE7t+1+TE7t+1) x 1.015 ) x (1+(Ft+1/100))

Where:

WPE7t+1 is set equal to

(WE7 x PE7t+1 ) + ((1-WE7) x PPPE7t+1)

WE7 means the weighting factor given against the Licensees name in Column 3 of
Annex D to this Condition

PE7t+1 means the average unit price for the Licensees Domestic Economy 7 Tariff in
the twelfth relevant year calculated as follows, using the Licensees published
rates for that tariff, and without taking account of any Prompt Payment Discount
available under that tariff :

(Annual Standing Charge + (B1E7 x Day Primary Unit Rate) + ((3000 - B1E7) x
Day Secondary Unit Rate) + (3600 X Night Unit Rate)) / 6600

B1E7 has the value given against the Licensees name in Column 3 of Annex E to this
Condition

PPPE7t+1 means the average unit price for the Licensees Domestic Economy 7 Tariff in
the twelfth relevant year calculated as follows, using the Licensees published
rates for that tariff, and after taking account of any Prompt Payment Discount
available under that tariff :

(Annual Standing Charge + (B1E7 x Day Primary Unit Rate) + ((3000 - B1E7) x
Day Secondary Unit Rate) + (3600 x Night Unit Rate)) / 6600

BE7t+1 is set equal to

BE7t . (1+(RPIt+1/100))

DE7t+1 means a sum representing the distribution use of system charges incurred by the
Licensee in the twelfth relevant year in supplying a customer on a Domestic
Economy 7 Tariff, represented by the formula :

( D1E7t+1 + (3000 x D2E7t+1 ) + (3600 x D3E7t+1 ) + D4E7t+1 ) / 6600

D1E7t+1 is the distribution use of system charge annual standing charge for supplying that
customer

D2E7t+1 is the distribution use of system charge in respect of each day unit consumed by
that customer

D3E7t+1 is the distribution use of system charge in respect of each night unit consumed by
that customer

D4E7t+1 is the aggregate of all other relevant distribution charges for supplying that
customer

TE7t+1 is calculated in accordance with the following formula, provided that if the
Transmission Company changes the basis upon which it calculates or charges for
transmission network use of system charges, the Director may by direction
amend the formula to produce a value of TE7t+1 such that the Licensee is neither
advantaged nor disadvantaged by the change :

TNUOS x 0.1162 x Loss Adjustment Factor

where

Loss Adjustment Factor means the factor shown against the
Licensees name in column 3 of Annex C to this Condition

For the purposes of this paragraph 9, any cross references to it and this
Condition generally the terms BE7t , DE7t , and TE7t shall have the meanings given
respectively, in paragraph 8 above.

Supplementary Restrictions

10. Without prejudice to condition 3F, at the beginning of the
eleventh relevant year the Licensee shall set its prices on the
Restricted Tariffs so that, except with the prior written consent of the
Director, in addition to complying with paragraph 6 or, as the case
may be, paragraph 8, the limits in paragraph 11 shall apply.

11. The standing charge and unit rates for the Standard Domestic
Tariff and Domestic Economy 7 Tariff shall not at any point in time in
the eleventh relevant year exceed in each case the charges made at
the end of the tenth relevant year, multiplied by the formula :

(1+(RPIt / 100) ) x ((1+(Ft/100))/(1+(Fd/100)))

12. Without prejudice to Condition 3F, throughout the eleventh and
subsequent relevant years, the Licensee shall set its prices on all
tariffs available to Domestic Customers (other than the Restricted
Tariffs) so that the standing charge, unit rate or rates and any other
component parts of the tariffs shall not, except with the prior written
consent of the Director, in the relevant year t exceed

Cpt x (1 + (RPIt / 100 ) ) x ((1+(Ft/100))/(1+(Fd/100)))

Where

Cpt means each of the standing charge, unit rate or rates, and other component
parts of the tariff, approved by the Director, prevailing on 31 March of the
previous relevant year. Hence for the purposes of the eleventh relevant year, Cpt
means each of the standing charge, unit rate or rates, and other component parts
of the tariff, prevailing at the end of the tenth relevant year.

Prepayment Meter Tariffs

13. In the eleventh and subsequent relevant years, the total charge in any domestic
prepayment meter tariff, including charges made for the provision of the
prepayment meter, shall not exceed the total charge made in the equivalent
domestic tariff by more than the amount given against the Licensees name in
column 2 of Annex F.

14. The Director may by direction specify which tariffs are to be deemed
prepayment meter tariffs and which tariffs are their equivalent domestic tariffs.

Standing charges and unit rates

15. (a) Without prejudice to condition 3F, throughout the twelfth
relevant year and every subsequent relevant year, the Licensee shall
set its prices for the Standard Domestic Tariff and the Domestic
Economy 7 Tariff so that, except with the prior written consent of the
Director, the standing charge, unit rate or rates and any other
component part of those tariffs shall not exceed the formula given in
sub-paragraph (b),

Provided that if in the application of the formulae in paragraphs 7
and 9 in relevant year t :

the value of DSDt+1 in relation to the Standard Domestic Tariff exceeds

DSDt x (1 + (RPIt / 100 ) )

or the value of TSDt+1 in relation to the Standard Domestic Tariff
exceeds

TSDt x (1+ (RPIt / 100 ) )

or the value of DE7t+1 in relation to the Domestic Economy 7 Tariff
exceeds

DE7t x (1 + (RPIt / 100 ) )

or the value of TE7t+1 in relation to the Domestic Economy 7 Tariff
exceeds

TE7t x (1+ (RPIt / 100 ) )

then the Licensee may increase that Restricted Tariff up to the level
allowed by the paragraphs 7 or 9 as appropriate.

(b) The formula referred to in paragraph (a) is :

RTCpt x (1+(RPIt/100)) x ((1+(Ft/100))/(1+(Fd/100)))

Where

RTCpt means each of the standing charge, unit rate or rates, and other
component parts of the relevant Restricted Tariff, prevailing at the
end of relevant year t-1.

Generation, Supply Business, and Transmission Services Use of System Costs

16. If the costs to the Licensee of procuring or providing generation, supply or
transmission services use of system increase substantially in the aggregate due to
factors outside the Licensees control and for which the Licensee would not
reasonably have been expected to have provided so that the amount allowed for
under the terms BSD and BE7 in the formulae given in paragraphs 6 to 9 no longer
remunerate the Licensee appropriately, the Director may direct that, in the
eleventh or any subsequent relevant year (including any year to which paragraph
5 applies), the limits imposed by paragraphs 6 to 9 shall be raised to the extent
specified in the direction.

Fossil fuel levy

17. If at any time after the Licensee has set its prices for a relevant year the value of
Ft is changed by an amount which is less than half a percentage point in the value
of the then prevailing rate for Ft, after taking account of all other changes in the
value of Ft since its prices were set, the Licensee shall not be required, solely on
that account, to change the prices it has set.

Reporting requirements

18. Every three months, in each of the eleventh and subsequent relevant years, the
Licensee shall submit to the Director statements summarising the costs of
purchasing electricity for its Supply Business. Such statements shall be in a
form approved by the Director, and shall as a minimum include total and average
costs under electricity purchase contracts for the Supply Business, and that part
to be attributed to the domestic sector, for the relevant year to date and forecast
for the relevant year as a whole.

Timing

19 (a) This paragraph applies where :

(i) a reduction has been or is to be made in charges for distribution
use of system or transmission network use of system;
(ii) the effect of the reduction is or would be, if the Licensee did not reduce its
Restricted Tariffs, to cause the prices set by the Licensee to exceed the limits on
prices imposed by this Condition; and
(iii) the Licensee reasonably expects further changes to be made to the charges for
distribution use of system or transmission network use of system which will
further alter the limits on prices imposed by this Condition.

(b) Where this paragraph applies, the Licensee may give notice to the Director :

(i) specifying the reduction in charges for distribution use of system or transmission
network use of system which have been or are to be made;
(ii) describing the effect of the reduction on the limits on prices imposed by this
Condition; and
(iii) giving particulars of the further changes which it expects to be made in charges
for distribution use of system or transmission network use of system, including
particulars of the grounds for that expectation.

(c) If the Licensee gives such notice to the Director, and the grounds for the
explanation given in the notice are reasonable, the Licensee shall be deemed not
to be in breach (to the extent only that such breach is attributable to the reduction
in charges specified in the notice) of any limit on prices imposed by this
Condition during the period beginning with the date on which the Director
receives the notice and ending with the date specified in a direction given
pursuant to sub-paragraph (d) or, if no such direction is given, 28 days after the
reduction in prices referred to in sub-paragraph (b)(i) takes effect.

(d) The Director may give a direction

(i) specifying the end of the period during which the Licensee is
deemed not to be in breach of the limits on prices imposed by this
Condition on account of the change in charges specified in the
notice (which period may be shorter or longer than 28 days from
when the change in charges takes effect) and / or

(ii) requiring the Licensee to make such reductions in its Restricted
Tariffs during such period as is specified in the direction as will
secure that the Licensee makes no significant gain as a result of
its being deemed not to be in breach of any limit on prices
imposed by this Condition.

Interpretation

20. In this Condition

(a) all prices and revenue shall exclude value added tax (if any);

(b) where published prices do not include an allowance for the fossil fuel levy,
for the purposes of this condition such prices shall be adjusted to include the
relevant fossil fuel levy;

(c) any reference to the first relevant year means the relevant year commencing 1
April 1990 and any reference to the second relevant year and so on shall be
construed accordingly;

(d) in addition to the definitions given within this Condition the following
term(s) shall have the following meaning :

Standard Domestic Tariff means that tariff offered by the Licensee during the
tenth relevant year specified against the Licensees name in Column 2 of Annex
A to this Condition;

Domestic Economy 7 Tariff means that tariff offered by the Licensee during
the tenth relevant year specified against the Licensees name in Column 3 of
Annex A to this Condition;

Restricted Tariffs means the Standard Domestic Tariff and the Domestic
Economy 7 Tariff taken together;

Prompt Payment Discount means any discount or reduction, given in respect
of the relevant year (quantified on the assumption of 3300 kWh annual
consumption for a Standard Domestic Tariff, and on the basis of 6600 kWh
annual consumption for a Domestic Economy 7 Tariff), for the prompt or timely
payment of bills by cash or cheque, compared with the charge which would be
made where payment is not made promptly or on time.

the Transmission Licence means the licence to transmit electricity in England
and Wales held by the Transmission Company.

Transmission Company means the National Grid Company plc

RPIt means the percentage change (whether of 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.

Ft means the rate of the fossil fuel levy prevailing from time to time

Fd means the fossil fuel levy rate prevailing at 31 March in the previous relevant
year. Hence for the purposes of the eleventh relevant year, Fd means 0.3

ANNEX A

The Restricted Tariffs

Column 1
Column 2
Column 3

Standard Domestic Tariff
Domestic Economy 7 Tariff

Eastern
Domestic General Tariff: Table 2
Domestic Economy 7 Tariff: Table 2
East Midlands
Standard Tariff
Economy 7 Tariff
London
General Purpose Rate (Quarterly)
Economy 7 Rate (Quarterly)
Manweb
Domestic S
Economy 7
Midlands
D1 Domestic Credit Meter Tariff
D5 Domestic Economy 7 Tariff
Northern
Standard Domestic Tariff (D1)
Economy 7 Domestic Tariff (D1T)
NORWEB
D13 Domestic Tariff
D56 Economy 7 Tariff
SEEBOARD
Standard Domestic
Economy 7 Domestic
Southern
General Tariff (Quarterly)
Economy 7 Tariff (Quarterly)
SWALEC
Domestic Standard Tariff (Quarterly)
Domestic Economy 7 Tariff (Quarterly)
South Western
Domestic Tariff
Economy 7 Tariff
Yorkshire
General Domestic (GD)
Economy 7 (E7)

ANNEX B

Base Allowances

Pence per kWh (2000/01 prices)

Column 1
Column 2
Column 3

BSD
BE7

Eastern
4.867
3.766
East Midlands
4.910
3.767
London
4.953
3.799
Manweb
5.158
3.956
Midlands
4.917
3.769
Northern
5.012
3.833
NORWEB
4.935
3.799
SEEBOARD
4.956
3.812
Southern
4.961
3.805
SWALEC
5.128
3.893
South Western
5.010
3.833
Yorkshire
4.968
3.808

ANNEX C

Peak loss adjustment factors

Column 1
Column 2
Column 3

Standard Domestic
Tariff
Domestic Economy 7 Tariff
Eastern
1.0877
1.0875
East Midlands
1.0893
1.0891
London
1.0931
1.0928
Manweb
1.1487
1.1481
Midlands
1.0880
1.0876
Northern
1.0938
1.0936
NORWEB
1.0933
1.0932
SEEBOARD
1.0975
1.0973
Southern
1.0870
1.0867
SWALEC
1.0915
1.0913
South Western
1.0839
1.0838
Yorkshire
1.1016
1.1012

ANNEX D

Prompt payment discount weightings

Column 1
Column 2
Column 3

WSD
WE7
Eastern
0.902
0.886
East Midlands
1.000
1.000
London
1.000
1.000
Manweb
0.424
0.401
Midlands
1.000
1.000
Northern
0.223
0.263
NORWEB
1.000
1.000
SEEBOARD
1.000
1.000
Southern
0.495
0.503
SWALEC
1.000
1.000
South Western
1.000
1.000
Yorkshire
0.314
0.262

ANNEX E

Band blocks

Column 1
Column 2
Column 3

B1SD
B1E7
Eastern
2283
2076
East Midlands
3300
3000
London
3300
3000
Manweb
3300
3000
Midlands
3300
3000
Northern
2272
1344
NORWEB
3300
3000
SEEBOARD
728
1096
Southern
2809
3000
SWALEC
3300
3000
South Western
3300
3000
Yorkshire
3300
3000

ANNEX F

Prepayment meter surcharge

Column 1
Column 2

(POUNDS)
Eastern
11.22
East Midlands
15.00
London
15.00
Manweb
15.00
Midlands
15.00
Northern
15.00
NORWEB
15.00
SEEBOARD
15.00
Southern
15.00
SWALEC
15.00
South Western
15.00
Yorkshire
15.00

ATTACHMENT 1
12/05/00
11

ATTACHMENT 1
</TABLE>

EXHIBIT 18

April 30, 2000

Yorkshire Power Group Limited
Wetherby Road
Scarcroft
Leeds LS14 3HS
United Kingdom

Dear Sirs/Madams:

At your request, we have read the description included in your Quarterly
Report on Form 10-Q to the Securities and Exchange Commission for the
quarter ended March 31, 2000, of the facts relating to the change from
an accelerated method of depreciation to the straight line method of
depreciation. We believe, on the basis of the facts so set forth and
other information furnished to us by appropriate officials of the Yorkshire
Power Group Limited (the Company), that the accounting change described
in your Form 10-Q is to an alternative accounting principle that is
preferable under the circumstances.

We have not audited any consolidated financial statements of the
Company and its consolidated subsidiaries as of any date or for any
period subsequent to December 31, 1999. Therefore, we are unable to
express, and we do not express, an opinion on the facts set forth in the
above-mentioned Form 10-Q, on the related information furnished to
us by officials of the Company, or on the financial position, results
of operations, or cash flows of Yorkshire Power Group Limited
and its consolidated subsidiaries as of any date
or for any period subsequent to December 31, 1999.

Yours truly,

DELOITTE & TOUCHE LLP
Columbus, Ohio

<ARTICLE> 5
<MULTIPLIER> 1,000,000
<CURRENCY> British Pounds Sterling
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1.5953
<CASH> 9
<SECURITIES> 16
<RECEIVABLES> 250
<ALLOWANCES> 9
<INVENTORY> 0
<CURRENT-ASSETS> 358
<PP&E> 1,186
<DEPRECIATION> 152
<TOTAL-ASSETS> 2,493
<CURRENT-LIABILITIES> 468
<BONDS> 1,131
0
162
<COMMON> 440
<OTHER-SE> 39
<TOTAL-LIABILITY-AND-EQUITY> 2,493
<SALES> 423
<TOTAL-REVENUES> 423
<CGS> 294
<TOTAL-COSTS> 294
<OTHER-EXPENSES> 67
<LOSS-PROVISION> 3
<INTEREST-EXPENSE> 29
<INCOME-PRETAX> 30
<INCOME-TAX> 10
<INCOME-CONTINUING> 20
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 8
<NET-INCOME> 28
<EPS-BASIC> 0 <F1>
<EPS-DILUTED> 0 <F1>
<FN>
<F1> N/A

</TABLE>