SCHEDULE

PART IV PERSONS EXEMPT IN RESPECT OF PARTICULAR REGULATED ACTIVITIES

F1Electricity industry

49.

(1)

NGC is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14, 21, 25 F2, 25D F3, 25DA or 53 of the Regulated Activities Order (dealing in investments as principal or agent, arranging deals in investments F2, operating a multilateral trading facility F4, operating an organised trading facility or advising on investments) which it carries on in the course of—

(a)

its participation in the Balancing and Settlement Arrangements as operator of the electricity transmission system in F5Great Britain under the Transmission Licence; or

(b)

the acquisition by it of Balancing Services in accordance with the Electricity Act 1989 and the Transmission Licence.

(2)

ELEXON Clear Limited is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14, 21 F6, 25 F7or 25DF7, 25D or 25DA of that Order which it carries on in the course of its participation in the Balancing and Settlement Arrangements as clearer for the purposes of (among other things) receiving from and paying to BSC Parties trading and reconciliation charges arising under the Balancing and Settlement Arrangements.

(3)

Each BSC Party is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 14, 21, 25 F8, 25D F9, 25DA or 53 of that Order which it carries on in the course of—

(a)

its participation in the Balancing and Settlement Arrangements; or

(b)

the provision by it (or, in the case of an activity of the kind specified by article 21 of that Order, its principal) of Balancing Services to NGC.

(4)

ELEXON Limited is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 25 F10F11or 25DF10, 25D or 25DA of that Order which it carries on in the course of its participation in the Balancing and Settlement Arrangements as administrator.

(5)

Each BSC Agent and each Volume Notification Agent is exempt from the general prohibition in respect of any regulated activity of the kind specified by article 25 F12F13or 25DF12, 25D or 25DA of that Order which it carries on in that capacity.

F14(6)

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

(7)

In this paragraph—

“Ancillary Services” means services which generators and suppliers of electricity and those making transfers of electricity across an Interconnector are required (as a condition of their connection to the transmission system in F5Great Britain), or have agreed, to make available to NGC for the purpose of securing the stability of the electricity transmission or any distribution system in F5Great Britain or any system linked to it by an Interconnector;

“Balancing and Settlement Arrangements” means—

(a)

the Balancing Mechanism; and

(b)

arrangements—

  1. (i)

    for the determination and allocation to BSC Parties of the quantities of electricity that have been delivered to and taken off the electricity transmission system and any distribution system in F5Great Britain; and

  2. (ii)

    which set, and provide for the determination and financial settlement of, BSC Parties' obligations arising by reference to the quantities referred to in sub-paragraph (i), including the difference between such quantities (after taking account of accepted bids and offers in the Balancing Mechanism) and the quantities of electricity contracted for sale and purchase between BSC Parties;

“Balancing Mechanism” means the arrangements pursuant to which BSC Parties may make, and NGC may accept, offers or bids to increase or decrease the quantities of electricity to be delviered to or taken off the electricity transmission system or any distribution system in F5Great Britain at any time or during any period so as to assist NGC in operating and balancing the electricity transmission system, and arrangements for the settlement of financial obligations arising from the acceptance of such offers and bids;

“Balancing Services” means—

(a)

offers and bids made in the Balancing Mechanism;

(b)

Ancillary Services; and

(c)

other services available to NGC which assist it in operating the electricity transmission system in accordance with the Electricity Act 1989 and the Transmission Licence;

BSC Agents” means the persons for the time being engaged by or on behalf of ELEXON Limited for the purpose of providing services to all BSC Parties, NGC, ELEXON Limited and ELEXON Clear Limited in connection with the operation of the Balancing and Settlement Arrangements;

F15“BSC Framework Agreement” means the agreement of that title in the form approved by the Secretary of State for the purpose of conditions of the Transmission Licence and which is dated 14 August 2000; and “conditions” for the purposes of this definition means conditions determined by the Secretary of State under powers granted by section 137(1) of the Energy Act 2004. and incorporated into existing electricity transmission licences by a scheme made by the Secretary of State pursuant to section 138 of, and Schedule 17 to, that Act;

BSC Parties” means those persons (other than NGC, ELEXON Limited and ELEXON Clear Limited) who have signed or acceded to (in accordance with the terms of the BSC Framework Agreement), and not withdrawn from, the BSC Framework Agreement;

“Interconnector” means the electric lines and electrical plant F16and meters used F17solely for the transfer of electricity to or from the electricity transmission system F18... in F5Great Britain into or out of F5Great Britain;

“NGC” means F19... National Grid Company plc;

F20...

“the Transmission Licence” means the licence to F21participate in the transmission of electricity in F5Great Britain granted F22, or treated as granted, to NGC under section 6(1)(b) of the Electricity Act 1989; and

“Volume Notification Agents” means the persons for the time being appointed and authorised under and in accordance with the Balancing and Settlement Arrangements on behalf of BSC Parties to notify to the BSC Agent designated for that purpose pursuant to the Balancing and Settlement Arrangements quantities of electricity contracted for the sale and purchase between those BSC Parties to be taken into account for the purposes of the Balancing and Settlement Arrangements.