Part I ELECTRICITY SUPPLY

Introductory

F13A The principal objective and general duties of the Secretary of State and the Authority.

(1)

The principal objective of the Secretary of State and the Gas and Electricity Markets Authority (in this Act referred to as “the Authority”) in carrying out their respective functions under this Part is to protect the interests of F2existing and future consumers in relation to electricity conveyed by distribution systems F3or transmission systems, wherever appropriate by promoting effective competition between persons engaged in, or in commercial activities connected with, the generation, transmission, distribution or supply of electricity F4or the provision or use of electricity interconnectors.

(2)

The Secretary of State and the Authority shall carry out those functions in the manner which he or it considers is best calculated to further the principal objective, having regard to—

(a)

the need to secure that all reasonable demands for electricity are met; and

(b)

the need to secure that licence holders are able to finance the activities which are the subject of obligations imposed by or under this PartF5, the Utilities Act 2000F6, Part 2 or 3 of the Energy Act 2004 or Part 2 or 5 of the Energy Act 2008F7; and

(c)

the need to contribute to the achievement of sustainable development.

(3)

In performing that duty, the Secretary of State or the Authority shall have regard to the interests of—

(a)

individuals who are disabled or chronically sick;

(b)

individuals of pensionable age;

(c)

individuals with low incomes; and

(d)

individuals residing in rural areas;

but that is not to be taken as implying that regard may not be had to the interests of other descriptions of consumer.

(4)

The Secretary of State and the Authority may, in carrying out any function under this Part, have regard to—

(a)

the interests of consumers in relation to gas conveyed through pipes (within the meaning of the M1Gas Act 1986); and

(b)

any interests of consumers in relation to—

F8(i)

communications services and electronic communications apparatus, or

(ii)

water services or sewerage services (within the meaning of the M2Water Industry Act 1991),

which are affected by the carrying out of that function.

(5)

Subject to subsection (2), the Secretary of State and the Authority shall carry out their respective functions under this Part in the manner which he or it considers is best calculated—

(a)

to promote efficiency and economy on the part of persons authorised by licences or exemptions to F9distribute, supply or participate in the transmission of electricity F10or to participate in the operation of electricity interconnectors and the efficient use of electricity conveyed by distribution systems F11or transmission systems;

(b)

to protect the public from dangers arising from the generation, transmission, distribution or supply of electricity;

F12(ba)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)

to secure a diverse and viable long-term energy supply,

F13and (so far as not otherwise required to do so by this subsection) shall, in carrying out those functions, have regard to the effect on the environment of activities connected with the generation, transmission, distribution or supply of electricity.

F14(5A)

In carrying out their respective functions under this Part in accordance with the preceding provisions of this section the Secretary of State and the Authority must each have regard to—

(a)

the principles under which regulatory activities should be transparent, accountable, proportionate, consistent and targeted only at cases in which action is needed; and

(b)

any other principles appearing to him or, as the case may be, it to represent the best regulatory practice.

(6)

In F15subsections (3) and (4) references to consumers include both existing and future consumers.

(7)

In this section and sections 3B and 3C, references to functions of the Secretary of State or the Authority under this Part include a reference to functions under the Utilities Act 2000 which relate to electricity conveyed by distribution systems F16or transmission systems.

(8)

In this Part, unless the context otherwise requires—

“exemption” means an exemption granted under section 5;

“licence” means a licence under section 6 and “licence holder” shall be construed accordingly.