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

22.  Insert as Schedule 2—

Regulation 51H(1)

“SCHEDULE 2 The CHP Relief Condition

Introduction

1.   These obligations are for the purpose of ensuring the correct application of CCL to the outputs of a fully exempt or a partly exempt combined heat and power station.

CHP LEC and outputs record

2.   A person to whom regulation 51H(1) applies must for the purposes of that regulation keep and maintain a discrete, proper, accurate and true record (the “CHP outputs record”) of–

(a) any relevant supply of electricity constituting an output of the station in question for the purposes of paragraph 15(1) of the Act (supplies to stations);

(b) any relevant supply in relation to which CCL is not accounted for because of an exemption provided for by paragraph 16(2), 17(3) or 17(4) of the Act (supplies from partly exempt CHP and self-supplies);

(c) any relevant supply in relation to which CCL is not accounted for because of an exemption provided for by paragraph 17(2) of the Act (self-supply by autogenerator) (but only if the electricity in question is QPO electricity).

3.— (1) That record must also identify separately, according to the following categories, each MWh of QPO electricity that is an output of the station in question and allocate to each such MWh a CHP LEC issued in respect of QPO electricity.

(2) The categories are–

(a) self-supplies of the electricity;

(b) supplies made to the person who consumes the electricity;

(c) supplies made to a person who makes a supply of the electricity.

(3) A CHP LEC (or any part of it) that remains allocated to a supply must not be allocated to any other supply.

(4) The allocation must be made no later than the 120th day following when the supply is treated as taking place.

(5) Any restricted CHP LEC must be identified as such in the record no later than the 30th day after the one on which the notification that the relevant Authority has restricted its validity to indirect supplies is received (see regulation 51D and paragraph 11(5)).

4.   That record must also show the quantity of all electricity that is an output of the station in question but in relation to which no CHP LEC is issued (including for this purpose, and discretely identified, any renewable source electricity (see Part IV) or electricity produced when no exemption certificate is in force for the station).

5.   That record must show –

(a) when each relevant supply of electricity is treated as taking place and the recipient of each such supply;

(b) the CHP LEC (if any) relating to that electricity and, if different from the recipient, the identity of any person to whom entitlement to the CHP LEC is transferred;

(c) the date (or dates) on which each other event to which it relates occurs;

(d) the date on which each entry to the record is made.

6.   That record must be kept for 6 years starting from each reconciliation day to which it is relevant (see paragraphs 10 and 13(3)).

7.   Subject to paragraph 6, that record must be made available on request and at any reasonable time to a person authorised by–

(a) the Secretary of State, or

(b) the relevant Authority.

8.— (1) This paragraph applies when paragraphs 2 to 7 are not fully met.

(2) The relevant Authority may refuse to certify or issue any CHP LEC in relation to electricity produced in the station (see regulations 51B(1) and 51B(8)).

(3) The relevant Authority may also restrict the validity of any relevant and as yet unrestricted CHP LEC to indirect supplies, in which case the relevant Authority must as soon as practicable notify that restriction to the person to whom it was issued (see regulation 51B(8)).

• A CHP LEC is relevant for this purpose if it has not been reconciled in accordance with this Schedule (see paragraph 13(1)).

Reconciliation of outputs

9.   For the purposes of the following paragraphs, regard a completed calendar year as one for which 31 December is passed and an incompleted calendar year as one for which 31 December is not passed.

10.— (1) The reconciliation day for a completed calendar year is the earlier of–

(a) the first day of the month in the subsequent calendar year in which regulation 3(2) of the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001(1) is met in relation to the station (current CHPQA certificate sent to Secretary of State by 30 June);

(b) the day in the subsequent calendar year on which revocation of the current exemption certificate takes effect pursuant to regulation 4(2) of those Regulations (station ceases to operate, current CHPQA certificate not sent to Secretary of State by 30 June, or relevant written request to Secretary of State).

The “reconciliation span” relating to this reconciliation day spans 1 January in the completed calendar year to the day before the reconciliation day, inclusive.

(2) A reconciliation day for an incompleted calendar year is any day in that incompleted calendar year on which revocation of the current exemption certificate takes effect pursuant to regulation 4(2) of those Regulations.

The “reconciliation span” relating to any such reconciliation day spans 1 January in that calendar year to the day before that reconciliation day, inclusive.

(3) The relevant Authority shall act in accordance with paragraph 11 no later than the 90th day following a reconciliation day, subject as appropriate to regulations 51C and 51D (relevant Authority neither certifying electricity nor issuing CHP LEC, or relevant Authority dealing with incorrect certification).

(4) A reconciliation day in paragraph (2) may arise irrespective of any overlap between the reconciliation span in that paragraph with the reconciliation span in paragraph (1).

11.— (1) The relevant Authority shall determine whether insufficient or excessive CHP LECs have been issued and remain unrestricted as respects each reconciliation span, having proper regard to the difference between–

(a) the quantity of QPO electricity actually produced in the station during that reconciliation span, and

(b) the quantity of QPO electricity represented by the CHP LECs issued as respects electricity produced in the station during that reconciliation span and remaining unrestricted.

(2) If the relevant Authority determines that insufficient CHP LECs have been issued and remain unrestricted as respects a reconciliation span, it must–

(a) to the extent of that insufficiency, and

(b) as respects that reconciliation span,

issue additional CHP LECs (see regulation 51B(8)) as respects the QPO electricity outputs of the station.

• Any such CHP LEC must, within 60 days of issue, be allocated by the person referred to in paragraph 2 to relevant and appropriate supplies identified in the record as taking place in that reconciliation span.

(3) If the relevant Authority determines that excessive CHP LECs have been issued and remain unrestricted as respects a reconciliation span, it must act in accordance with paragraphs (4) and (5), as appropriate.

(4) If the reconciliation day arises because regulation 3(2) of the Climate Change Levy (Combined Heat and Power Stations) Exemption Certificate Regulations 2001 is met (see paragraph 10(1)(a)), the relevant Authority must treat the excess CHP LECs as being prospectively referable to figures made known to it by the operator for the purposes of regulation 51B(2) as respects production in the station after the relevant reconciliation day.

(5) If the relevant reconciliation day arises because the exemption certificate is revoked (see paragraph 10(1)(b)), the relevant Authority must restrict the validity of any excess CHP LECs to indirect supplies, in which case it must as soon as practicable notify that restriction to the person to whom the CHP LEC in question was issued or to any person appearing to control the station (see regulation 51B(8)).

• The relevant Authority must ensure that those CHP LECs remaining unrestricted afterwards (and not yet reconciled, see paragraph 13(1)) collectively represent QPO electricity produced in the station during the reconciliation span.

(6) For the purposes of this paragraph, the relevant Authority must regard calendar year 2003 as beginning on 1 April 2003.

(7) For the purposes of regulation 51B(6) (QPO electricity referable to calendar year), the relevant Authority must not regard electricity referable to before 1 April 2003 as QPO electricity.

Monitoring and balancing obligation

12.— (1) The CHP outputs record must never show or indicate as respects a reconciliation span–

(a) a deficit of unrestricted CHP LECs in relation to the total quantity of QPO electricity identified in the record pursuant to paragraph 3(2)(a) and 3(2)(b) (self-supplies and supplies to consumers);

(b) a deficit of unrestricted plus restricted CHP LECs in relation to the total quantity of QPO electricity identified pursuant to paragraph 3(2)(a), 3(2)(b) and 3(2)(c) (self-supplies, supplies to consumers and supplies to others).

(2) Each deficit representing 1 MWh shall be regarded as a separate breach of this paragraph for the purposes of regulation 60(1)(hb) (penalties).

(3) Paragraph (1) has effect subject to paragraphs 3(4), 3(5), 11(2) and 11(5).

(4) Paragraph (1) continues to apply after a CHP LEC is reconciled (see paragraph 13(1)).

Interpretation

13.— (1) A CHP LEC is “reconciled” for the purposes of this Schedule only if–

(a) it is the subject of a reconciliation span in relation to which the relevant Authority has performed its functions under paragraph 10(3), and

(b) it is allocated, if required, in accordance with paragraph 11(2).

(2) A CHP LEC the validity of which is restricted under paragraph 8(3) or 11(5) may be regarded as a restricted CHP LEC for the purposes of regulations 51I to 51M.

(3) The CHP outputs record is relevant to a reconciliation day to the extent that it records (or is required to record) events taking place during the reconciliation span relating to that reconciliation day (see paragraphs 6, 10(1) and 10(2)).

(4) See also regulation 51A.”.

(1)

S.I. 2001/486.