The Climate Change Levy (General) (Amendment) Regulations 2003

19.  Insert after Part IV—

“PART IV(A) Combined heat and power stations

Interpretation of Part IV(A)

51A.   For the purposes of this Part and Schedule 2–

“authorised person” (except for the purposes of Schedule 2, paragraph 7(a)) refers to a person authorised by the relevant Authority;

“CHP declaration contract” refers to the contract mentioned in paragraph 20A(1)(b) of the Act(1);

“CHP Relief Condition” refers to paragraphs 2 to 7 and paragraph 12 of Schedule 2;

“exemption certificate” refers to a full-exemption certificate or a part-exemption certificate (see paragraphs 148(2) and 148(3) of the Act and the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001(2));

“fully exempt CHP” refers to a fully exempt combined heat and power station (see paragraph 148(2) of the Act);

“indirect supplies” refers to supplies in relation to which provision is made by paragraph 20A(1) of the Act (exemption for supply made by electricity utility of CHP electricity)(3);

“MWh” is an abbreviation for megawatt-hour;

“operator” refers to the person who operates a station(4) or who generates or produces electricity in that station;

“outputs” or “output” refers to the meaning given by paragraph 148(9) of the Act (electricity or motive power produced in a station, and (a) heat or steam, or (b) air, or water, that has been heated or cooled);

“partly exempt CHP” refers to a partly exempt combined heat and power station (see paragraph 148(3) of the Act);

“QPO” means qualifying power output(5);

“QPO electricity” refers to electricity that–

(a)

has been produced in a fully exempt CHP;

(b)

has been produced in a partly exempt CHP and supplied from it without causing the limit referred to in paragraph 16(2) of the Act(6) to be exceeded;

“station” refers to a fully or partly exempt CHP;

“relevant Authority” refers to the Gas and Electricity Markets Authority or, in relation to electricity produced or supplied in Northern Ireland or produced in the Republic of Ireland, the Director General of Electricity Supply for Northern Ireland.

Certification of electricity produced in a combined heat and power station

51B.— (1) The relevant Authority may certify that a given MWh of electricity is QPO electricity.

(2) The relevant Authority must only certify on the basis of the most accurate figures for electricity produced in an individual station that the station’s operator makes known to the Authority.

(3) The relevant Authority must disregard any figures that are made known to it or of which it becomes aware after the end of the second month following the end of the month in which the electricity is produced.

(4) Paragraph (3) does not apply to regulation 51D, regulation 51E or Schedule 2 paragraph 11 (wrongly certified electricity and periodic reconciliation).

(5) The station’s operator must only make known figures for the purposes of paragraph (2) that are made in accordance with the metering requirements of CHPQA Guidance Note 15 Version 1, published by the Department for Environment, Food and Rural Affairs(7).

(6) The relevant Authority must for the purposes of paragraphs (1) and (2)–

(a) regard electricity production in a station as being referable to the calendar year in which the electricity is produced, and

(b) regard the production of any of that electricity that constitutes QPO electricity as being spread evenly throughout that calendar year.

(7) The relevant Authority must not certify any electricity produced in a station when no exemption certificate is in force for that station.

(8) Where the relevant Authority certifies under paragraph (1), it must issue a levy exemption certificate (“CHP LEC”) as respects that electricity.

(9) A CHP LEC must be regarded for all purposes of this Part and Schedule 2 as only relating to the actual electricity in relation to which it was issued.

(10) Each CHP LEC must carry a unique identifying reference.

51C.— (1) The relevant Authority must neither certify electricity nor issue a CHP LEC as respects any electricity under any of the following circumstances.

(2) The first circumstance is where the quantity of electricity in question is less than 1 MWh.

• However the relevant Authority may aggregate or disaggregate such quantities relating to the same station, certifying each complete MWh as appropriate.

(3) The second circumstance is where the relevant Authority is not satisfied that the CHP LEC, if issued, would represent electricity consumed or to be consumed in the United Kingdom.

• For this purpose, the relevant Authority may have regard in particular to whether any part of that electricity is or may be allocated by the operator or a supplier for consumption outside the United Kingdom.

(4) The third circumstance is any one or more of the following–

(a) the operator not providing the relevant Authority with such information, particulars, records and declarations as the relevant Authority may require for the purposes of this Part or Schedule 2;

(b) the operator not providing the relevant Authority with any updated readings the relevant Authority may require from any relevant electricity meter;

(c) any authorised person not being granted, on request, access at any reasonable time to the station in question;

(d) any authorised person not being permitted, on request and having been granted access to the station–

(i) to inspect or test anything that is at the station and connected with the production or supply of any relevant electricity, and

(ii) to inspect any records that are at that station and so connected;

(e) any authorised person not, on request, being granted access to any premises at any reasonable time to take updated readings from any relevant electricity meter;

(f) the operator having been notified of an assessment to a civil penalty or to penalty interest in relation to an event subject to this Part or Schedule 2 and, irrespective of any relevant review or appeal, that amount being unrecovered (for assessments, see paragraphs 106 and 111 of the Act; for review and appeal, see Part XI of the Act);

(g) any one or more of sub-paragraphs (a) to (e) not being satisfied within such time as the relevant Authority considers reasonable for the purpose in question;

(h) the relevant Authority for any reason not being satisfied that the electricity in question should be certified as QPO electricity.

51D.— (1) If the relevant Authority becomes aware that it has issued a CHP LEC in relation to–

(a) production when no exemption certificate was in force for the relevant station, or

(b) production in relation to which there is a breach of regulation 51B(5) (metering standards),

it shall as soon as practicable both restrict the validity of that CHP LEC to indirect supplies (see regulations 51I to 51M) and notify that restriction to the person to whom it was issued (see regulation 51B(8)).

(2) A CHP LEC so restricted is referred to in the remainder of this Part and in Schedule 2 as a “restricted CHP LEC” and any other CHP LEC is referred to as an “unrestricted CHP LEC” (but see also Schedule 2 paragraphs 8(3), 11(5) and 13(2)).

51E.— (1) The relevant Authority shall, in carrying out its functions under this Part, have regard to the proper administration of CCL(8).

(2) The relevant Authority shall in particular, and as appropriate, act in accordance with and have regard to Schedule 2 paragraphs 8, 10 and 11.

(3) The relevant Authority must keep a record of each CHP LEC for 6 years from the date of issue.

• The record must show the person to whom it was issued, whether the CHP LEC is unrestricted or restricted, and any indirect supply of the electricity to which the CHP LEC is relevant (see regulation 51J(3)) .

CCL treatment dependent on certification

51F.   Electricity shall not be regarded as QPO electricity for the purposes of regulation 4(1)(a) of the Climate Change Levy (Electricity and Gas) Regulations 2001(9) (direct supplies of electricity by utility from fully exempt CHP) unless it remains the subject of an unrestricted CHP LEC.

51G.— (1) Electricity shall not be regarded as QPO electricity for any of the following purposes unless it remains the subject of an unrestricted CHP LEC–

(a) the outputs of a station referred to in paragraph 15(1) of the Act (supplies to CHP exempt if to be used in producing station’s outputs);

(b) the electricity referred to in paragraphs 16(1)(a), 17(3) and 17(4) of the Act (supplies from partly exempt CHP are exempt from CCL if specified limit not exceeded; self-supplies from station exempt if producer not auto-generator).

(2) Each of the following exemptions shall only be given effect subject to the CHP Relief Condition (see regulation 51H(1)) being fulfilled as follows–

(a) for paragraph 15(1) of the Act, the Condition must be fulfilled in relation to any QPO electricity that is a relevant output for the purposes of that paragraph (supplies to CHP exempt if for use in producing station’s outputs);

(b) for paragraph 16(2) of the Act, the Condition must be fulfilled in relation to any QPO electricity referred to in that paragraph (supplies from partly exempt CHP are exempt from CCL if specified limit not exceeded);

(c) for paragraph 17(2) of the Act, the Condition must be fulfilled in relation to any QPO electricity that is the subject of the supply referred to in that paragraph (self-supply by auto-generator exempt);

(d) for paragraph 17(3) or 17(4) of the Act, the Condition must be fulfilled in relation to any QPO electricity that is electricity for the purposes of that paragraph (self-supplies from fully or partly exempt CHP exempt from CCL if producer not auto-generator).

51H.— (1) Schedule 2 has effect and, accordingly, the CHP Relief Condition binds any person who–

(a) represents to a supplier entitlement to the exemption from CCL provided for by paragraph 15(1) of the Act (supplies of taxable commodities to stations, and see also paragraph (4));

(b) does not account for CCL on a supply because an exemption is provided for by paragraph 16(2), 17(3) or 17(4) of the Act (supplies from partly exempt CHP and self-supplies from fully or partly exempt CHP);

(c) does not account for CCL on a supply because an exemption is provided for by paragraph 17(2) of the Act (self-supply by autogenerator) (but only if the electricity in question is QPO electricity).

(2) Paragraph 1 and regulations 51F and 51G only apply in relation to supplies that are treated as taking place on or after 1 April 2003 (see paragraphs 25 to 39 of the Act, time of supply).

(3) Regulations 51F and 51G apply in addition to regulation 60(1)(hb) (penalties relating to CHP Relief Condition)).

(4) Part III and Schedule 1 apply independently of this Part (certification, etc. in relation to excluded, exempt, half-rate and reduced-rate supplies).

Supplies pursuant to CHP declaration contract

51I.   Electricity is only “CHP electricity” for the purposes of paragraphs 20A and 20B of the Act (exemption for indirect supplies) if it remains the subject of an unrestricted CHP LEC or a restricted CHP LEC.

51J.— (1) Any electricity that is the subject of a CHP LEC shall be regarded as never having been CHP electricity capable of being the subject of exempt CHP supplies for the purposes of paragraph 20A of the Act (indirect supplies) if one or more of the conditions prescribed in the following paragraphs are not fulfilled.

(2) The electricity must only be allocated to a supply to a person who intends it to be consumed in the United Kingdom.

(3) Should the electricity be allocated to some supply pursuant to some CHP declaration contract, the supplier must inform the relevant Authority of this fact and of the relevant CHP LEC’s unique identifying reference (see regulation 51B(10)).

(4) At any time up to 6 years after the day the electricity is produced, any supplier of that electricity must on request and within such time as the relevant Authority considers reasonable provide that Authority with readily legible records relating to and detailing–

(a) the supplies that supplier received or made of that electricity,

(b) the relevant suppliers or recipients of any supplies that supplier received or made of that electricity,

(c) the relevant CHP LECs and, if different from the relevant supplier or recipient, the identity of any person from or to whom entitlement to the CHP LEC was obtained or transferred.

51K.   Supplies shall not be regarded as exempt CHP supplies for the purposes of paragraph 20A of the Act unless–

(a) the supplier provides the recipient with a written notice for the duration of the CHP declaration contract, updated as necessary, setting out how to identify those supplies of electricity that–

(i) are or will be made under the CHP declaration contract, and

(ii) are or will be referred to on a climate change levy accounting document (or an invoice) issued in respect of those supplies;

(b) the supplier retains a copy of each such notice for 6 years starting from the day after it is provided to the recipient;

(c) the supplier provides a copy of any such notice to the Commissioners no later than 14 days after the Commissioners request one.

51L.   The exemption provided for by paragraph 20A(1) of the Act (indirect supplies) shall only be given effect if the supplier, and each other person (if any) who is an operator in relation to any CHP electricity allocated by the supplier to supplies under the CHP declaration contract in question, has delivered a copy of the notice referred to in paragraph 20A(1)(d) of the Act (agreement to fulfil conditions) to the relevant Authority.

51M.— (1) A supply of electricity is exempt from the levy chargeable under paragraph 5(1) of the Act, and electricity is “CHP electricity” for the purposes of paragraphs 20A and 20B of the Act, only if paragraph (2) is satisfied in relation to that electricity.

(2) The electricity must not have been produced when the station that produced it has received State aid exceeding any relevant limit in the “Community guidelines on State aid for environmental protection (2001/C 37/03)(10).”.

(1)

Regulation 2(1) of S.I. 2001/838, which these Regulations amend, provides that “the Act” refers to Schedule 6 to the Finance Act 2000.

(2)

S.I. 2001/486.

(3)

Paragraph 20A (and paragraph 20B) inserted by section 123 of the Finance Act 2002 (c. 23).

(4)

See S.I. 2001/486.

(5)

See S.I. 2001/1140.

(6)

See S.I. 2001/1140 regulation 5(2) (specified limit above which supplies of electricity from partly exempt CHP not exempt).

(7)

Version 1 posted on 31 January 2003 and available at http://www.chpqa.com. The metering requirements are in GN 15.7.

(8)

Regulation 2(1) of S.I. 2001/838, which these Regulations amend, provides that “CCL” refers to climate change levy.

(9)

S.I. 2001/1136.

(10)

OJ C 37, 3.2.2001, p. 3; available also on the World Wide Web at http://europa.eu.int.