The Warm Home Discount (England and Wales) Regulations 2022

PART 1 Introductory

Citation, commencement and extent

1.—(1) These Regulations may be cited as the Warm Home Discount (England and Wales) Regulations 2022.

(2) These Regulations come into force on the day after the day on which they are made.

(3) This regulation and regulation 31 extend to England and Wales and Scotland.

(4) Otherwise, these Regulations extend to England and Wales only.

Meaning of “E&W domestic customer”, “GB domestic customer” and “partner”

2.—(1) This regulation defines “E&W domestic customer”, “GB domestic customer” and “partner” and makes related provision for the purposes of these Regulations.

(2) “E&W domestic customer” means an owner or occupier of domestic premises in England or Wales, who is supplied with electricity or gas at those premises wholly or mainly for domestic purposes.

(3) “GB domestic customer” means an owner or occupier of domestic premises in England, Wales or Scotland, who is supplied with electricity or gas at those premises wholly or mainly for domestic purposes.

(4) For the purposes of these Regulations, where—

(a) an individual (“I”) is an owner or occupier of domestic premises at which electricity or gas is supplied for domestic purposes, and

(b) because I lacks the necessary capacity to arrange that supply, the electricity or gas is supplied at those premises to another person (“A”) who is not I’s partner (whether or not A is also an owner or occupier of those premises),

I is to be treated as the person who is supplied with electricity or gas at those premises.

(5) For the purposes of these Regulations, an individual is the partner of another individual if—

(a) they are married to, or civil partners of, each other and are members of the same household, or

(b) they are not married to, or civil partners of, each other but live together as if they were spouses or civil partners.

(6) Paragraph (7) applies if an individual (“I”) is staying in hospital, or residing in a care home or hospice, but would normally—

(a) occupy the premises at which I is supplied, or treated as supplied, with electricity or gas as their sole or main residence, or

(b) be a member of the same household as their spouse or civil partner, or live together with another person as if they were spouses or civil partners.

(7) Where this paragraph applies, I is to be treated for the purposes of these Regulations as continuing to occupy the relevant premises as their sole or main residence, be a member of the relevant household or live together with the relevant person (as the case may be) if—

(a) where I is staying in hospital, the duration of I’s stay has not exceeded 52 weeks from the date on which I was admitted;

(b) where I is residing in a care home or hospice, I’s residence there is temporary.

(8) For the purposes of paragraphs (6) and (7)—

(a) it does not matter whether the person’s stay in hospital, or residence in a care home or hospice, began before the start of the relevant scheme year;

(b) “care home” means—

(i) an establishment in England that is a care home within the meaning of section 3 of the Care Standards Act 2000(1);

(ii) a place in Wales at which a care home service within the meaning of Part 1 of the Regulation and Inspection of Social Care (Wales) Act 2016(2) is provided wholly or mainly to persons over the age of 18;

(iii) accommodation that is provided as a care home service within the meaning of paragraph 2 of schedule 12 to the Public Services Reform (Scotland) Act 2010(3);

(iv) an establishment in Northern Ireland that is a residential care home, or a nursing home, for the purposes of the Health and Personal Social Services (Quality, Improvement and Regulation) (Northern Ireland) Order 2003(4);

(c) “hospice” means an institution in the United Kingdom whose primary function is the provision of palliative care to persons resident there who are suffering from a progressive disease in its final stages.

Interpretation: general

3.—(1) In these Regulations—

“the 2011 Regulations” means the Warm Home Discount Regulations 2011(5);

“aggregate non-core spending obligation” is to be read in accordance with regulation 15;

“central heating system” means a system—

(a)

which provides heat for the purposes of space heating through a boiler or other heat source connected to one or more separate heat emitters, and

(b)

where the heat source and heat emitters are all situated in the same domestic premises or building;

“the commencement day” means the day on which these Regulations come into force;

“compulsory scheme electricity supplier”, other than in regulation 17(6)(a), has the meaning given in regulation 6(2);

“core group customer” has the meaning given in regulation 10(2);

“debt write-off” means the provision of assistance to reduce debts for electricity or gas supply to domestic premises by cancelling or reducing the debts;

“E&W domestic customer” has the meaning given in regulation 2(2);

“electricity supply licence” means a licence granted under section 6(1)(d) of the Electricity Act 1989(6);

“eligibility statement” has the meaning given in regulation 9(2);

“energy advice” means advice on reducing or preventing the wastage of energy in domestic premises;

“gas supply licence” means a licence granted under section 7A(1) of the Gas Act 1986(7);

“GB domestic customer” has the meaning given in regulation 2(3);

“group of companies” means a holding company and its wholly-owned subsidiaries, where “holding company” and “wholly-owned subsidiary” have the meanings given by section 1159 of the Companies Act 2006(8);

“guarantee credit” is to be construed in accordance with sections 1 and 2 of the State Pension Credit Act 2002(9);

“industry initiative” has the meaning given in regulation 21(1);

“non-core spending obligation” is to be read, other than in regulation 18(2)(b), in accordance with regulation 17;

“prescribed rebate”, other than in regulation 18, means a rebate of £150;

“rebate notice” has the meaning given in regulation 8(1);

“the Scheme” has the meaning given in regulation 4;

“scheme electricity supplier” means—

(a)

a compulsory scheme electricity supplier, or

(b)

a voluntary scheme electricity supplier;

“scheme gas supplier” has the meaning given in regulation 6(8);

“scheme year”, other than in the expression “scheme year 11”, means—

(a)

the period beginning with the commencement day and ending with 31st March 2023 (“scheme year 12”), or

(b)

a period of 12 months beginning with 1st April in any of the years from 2023 to 2025 (and “scheme year” followed by a number from 13 to 15 means the scheme year beginning in 2023, 2024 or 2025 respectively);

“scheme year 11” has the meaning given by regulation 2(1) of the 2011 Regulations;

“smart meter advice” means advice on the benefits of using a smart meter in domestic premises;

“voluntary scheme electricity supplier” has the meaning given in regulation 6(6);

“working day” means a day other than—

(a)

a Saturday or a Sunday,

(b)

Christmas Day or Good Friday, or

(c)

a day which is a bank holiday under section 1 of the Banking and Financial Dealings Act 1971(10) in England and Wales.

(2) For the purposes of these Regulations, a licensed supplier(11) is connected to another licensed supplier if they both belong to the same group of companies.

PART 2 The Scheme: introductory

Warm Home Discount Scheme for England and Wales

4.—(1) These Regulations make provision for the continuation, in England and Wales, of the scheme for reducing fuel poverty established by the 2011 Regulations (“ the Scheme”).

(2) The Scheme, as continued by these Regulations—

(a) is to be known as the Warm Home Discount (England and Wales) Scheme, and

(b) has effect during the period beginning with the commencement day and ending with 31st March 2026 (“the scheme period”).

(3) The following duties and powers continue to apply after the end of the scheme period—

(a) the duties of scheme suppliers(12) under regulations 12(7) and (8), and 28(3),

(b) the duties of the Secretary of State under regulation 13,

(c) the duties of the Authority under regulation 27, and

(d) the powers of the Authority under regulation 28(1) and 28(2).

Calculation of a relevant supplier’s number of GB domestic customers on preceding 31st December

5.—(1) A relevant supplier must notify the Authority of the number of that supplier’s GB domestic customers on the preceding 31st December by—

(a) the 21st day after the commencement day;

(b) 1st February, in 2023, 2024 and 2025.

(2) In this regulation “relevant supplier” means—

(a) a licensed electricity supplier(13), or

(b) a licensed gas supplier(14) who, on the preceding 31st December, was connected to a licensed electricity supplier.

(3) If a relevant supplier does not notify the Authority in accordance with paragraph (1), the Authority must determine the supplier’s number of GB domestic customers on the preceding 31st December.

(4) But if—

(a) before the commencement day, a relevant supplier has notified the Authority of the number of that supplier’s GB domestic customers on 31st December 2021 (the “original notification”), and

(b) the relevant supplier does not notify the Authority in accordance with paragraph (1)(a) of a change in the number of that supplier’s GB domestic customers,

the Authority must treat the original notification as the relevant supplier’s notification under paragraph (1)(a).

(5) For the purposes of paragraphs (1) to (4), a relevant supplier’s number of GB domestic customers on the preceding 31st December is the number of GB domestic customers to whom the supplier supplies—

(a) electricity (other than as part of the supply of dual fuel),

(b) gas (other than as part of the supply of dual fuel), and

(c) dual fuel,

on that date.

(6) For the purposes of paragraph (5)—

(a) “dual fuel” means electricity and gas, where both are supplied to a GB domestic customer at the same domestic premises by a person who is both a licensed electricity supplier and a licensed gas supplier;

(b) a supply of dual fuel to a GB domestic customer is to be treated as a supply to two GB domestic customers.

(7) For the purposes of the remaining provisions of these Regulations, a reference to a supplier’s number of GB domestic customers is a reference to that supplier’s number of GB domestic customers as notified, or treated as notified, under paragraph (1) or, as the case may be, determined under paragraph (3).

Licensed suppliers who are scheme suppliers

6.—(1) This regulation sets out the licensed suppliers who are scheme suppliers in relation to a scheme year.

(2) A licensed electricity supplier is a compulsory scheme electricity supplier in relation to a scheme year if the supplier—

(a) supplied electricity to GB domestic customers on 31st December preceding the start of that scheme year, and

(b) satisfies the condition in paragraph (3) or (4) (or both).

(3) The condition in this paragraph is that the supplier had at least the relevant number of GB domestic customers on 31st December preceding the start of the scheme year.

(4) The condition in this paragraph is that—

(a) the supplier, and

(b) any licensed suppliers who were connected to the supplier on 31st December preceding the start of the scheme year,

together had at least the relevant number of GB domestic customers on that date.

(5) For the purposes of paragraphs (3) and (4), the relevant number of GB domestic customers is—

(a) in relation to scheme year 12, 50,000;

(b) in relation to any other scheme year, 1,000.

(6) A licensed electricity supplier is a voluntary scheme electricity supplier in relation to a scheme year if—

(a) the supplier is not a compulsory scheme electricity supplier, but notifies the Authority on or before the notification date that it wishes Part 3 to apply to the supplier in that scheme year, and

(b) the Authority approves that notification.

(7) For the purposes of paragraph (6) “the notification date” means—

(a) in relation to scheme year 12, the 21st day after the commencement day;

(b) in relation to any other scheme year, 1st February preceding the start of that scheme year.

(8) A licensed gas supplier is a scheme gas supplier in relation to a scheme year if the supplier—

(a) supplied gas to GB domestic customers on 31st December preceding the start of that scheme year, and

(b) was on that date connected to a licensed electricity supplier who is, in relation to that scheme year, a scheme electricity supplier.

Suppliers not participating in the scheme in a scheme year

7.—(1) This regulation applies to a licensed electricity supplier in a scheme year (“ the current year”) if the supplier—

(a) is not a scheme electricity supplier in relation to the current year, but

(b) was—

(i) where the current year is scheme year 12, an SY11 supplier, or

(ii) in any other case, a scheme electricity supplier in relation to the scheme year preceding the current year.

(2) A licensed electricity supplier to whom this regulation applies must—

(a) place a statement on its website that it is not participating in the Scheme in the current year, and

(b) notify its former core group customers in writing that it is not participating in the Scheme in the current year.

(3) The statement under paragraph (2)(a) must—

(a) be placed in a prominent and publicly accessible location on the licensed electricity supplier’s website on or before the relevant date, and

(b) remain in a prominent and publicly accessible location on that website for the remainder of the current year.

(4) The notification under paragraph (2)(b) must, so far as reasonably practicable, be given on or before the relevant date.

(5) In this regulation—

“former core group customer”, in relation to a supplier, means a person who—

(a)

is an E&W domestic customer of the supplier, and

(b)

was—

(i)

where the current year is scheme year 12, an SY11 customer of the supplier, or

(ii)

otherwise, a core group customer in the scheme year preceding the current year;

“the relevant date” means the date falling one month after the date on which the current year starts;

“SY11 customer”, in relation to an SY11 supplier, means a person who was a core group customer (within the meaning given in regulation 7(2) of the 2011 Regulations) of that supplier in scheme year 11;

“SY11 supplier” means a person who was a scheme electricity supplier (within the meaning given in regulation 2(1) of the 2011 Regulations) in relation to scheme year 11.

PART 3 The Core Spending Obligation

Determination of scheme customers by the Secretary of State

8.—(1) The Secretary of State may in any scheme year give a notice (a “rebate notice”) to a scheme electricity supplier specifying persons to whom the supplier must provide the prescribed rebate in accordance with regulation 10.

(2) The Secretary of State may give a scheme electricity supplier more than one rebate notice in a scheme year.

(3) A rebate notice may not be given—

(a) before the eligibility statement for the scheme year in which the notice is to be given is published (see regulation 9);

(b) in scheme year 15, after 1st March 2026.

(4) A rebate notice containing personal information (within the meaning of section 40(5) of the Digital Economy Act 2017(15)) may only be given if—

(a) the personal information is given with the consent of the person to whom it relates,

(b) regulations are in force under section 142 of the Pensions Act 2008(16) and those regulations authorise the Secretary of State to provide the supplier with the personal information contained in the notice, or

(c) the Secretary of State is authorised by section 36 of the Digital Economy Act 2017(17) to provide the electricity supplier with the personal information contained in the notice.

(5) The Secretary of State may not specify a person (“P”) in a rebate notice unless it appears to the Secretary of State that—

(a) P is an E&W domestic customer of the scheme electricity supplier,

(b) the premises at which P is supplied, or is treated as supplied, with electricity (“the qualifying premises”) are occupied by P as their sole or main residence, and

(c) P, or, where both P and P’s partner occupy the qualifying premises as their sole or main residence, P or P’s partner—

(i) is in receipt of guarantee credit, or

(ii) meets the criteria described in the relevant eligibility statement.

Eligibility statement

9.—(1) The Secretary of State must publish an eligibility statement for each scheme year.

(2) An “eligibility statement” is a document which describes the criteria adopted by the Secretary of State for the purpose of providing the prescribed rebate in a scheme year to persons living in fuel poverty(18) or in a fuel poverty risk group(19).

(3) An eligibility statement—

(a) may be for one or more scheme years;

(b) must state which scheme year or years it is for.

(4) The Secretary of State may amend an eligibility statement for—

(a) a scheme year, or

(b) where a statement is for more than one scheme year, any or all of those scheme years.

(5) The Secretary of State must publish the amended eligibility statement.

Provision of rebate to core group customers

10.—(1) A scheme electricity supplier who is given a rebate notice must provide the prescribed rebate to each core group customer.

(2) In these Regulations “core group customer”, in relation to a scheme electricity supplier, means a person specified in a rebate notice who—

(a) is an E&W domestic customer of the supplier, or

(b) was an E&W domestic customer of the supplier, if, during the scheme year in which the notice is given, the supplier has informed the Secretary of State that the person is an E&W domestic customer of the supplier.

(3) The scheme electricity supplier must provide the prescribed rebate to a core group customer by—

(a) crediting to the customer’s electricity account an amount as a result of which the amount (including Value Added Tax) charged to the customer is reduced by the amount of the prescribed rebate,

(b) following a request by the customer, crediting to the customer’s gas account an amount as a result of which the amount (including Value Added Tax) charged to the customer is reduced by the amount of the prescribed rebate,

(c) tendering payment of the amount of the prescribed rebate to the customer,

(d) providing a customer who pre-pays for electricity with credit to the amount of the prescribed rebate against the cost (including Value Added Tax) of future electricity use, or

(e) following a request by a customer who pre-pays for gas, providing the customer with credit to the amount of the prescribed rebate against the cost (including Value Added Tax) of future gas use.

(4) The date on which the prescribed rebate is provided to a core group customer is the date on which the scheme electricity supplier complies with paragraph (3).

(5) If the rebate notice is given to the scheme electricity supplier on or before 1st March in a scheme year, the supplier must provide the prescribed rebate to the core group customers specified in the notice by 31st March in that scheme year.

(6) If the rebate notice is given to the scheme electricity supplier after 1st March in a scheme year—

(a) the supplier must provide the prescribed rebate to the core group customers specified in the notice before the end of the period of 30 days beginning with the day on which it receives the notice, and

(b) the prescribed rebate is to be treated as being provided in the scheme year in which the notice is given.

(7) A scheme electricity supplier who provides the prescribed rebate to a core group customer must—

(a) specify on the customer’s bill, or

(b) otherwise notify the customer in writing,

that the customer has been given a rebate under the Scheme.

(8) This regulation is subject to regulation 11.

Exceptions

11.—(1) This regulation applies if the Secretary of State is satisfied that there are circumstances in which it would not be reasonably practicable for scheme electricity suppliers to provide the prescribed rebate to core group customers.

(2) The Secretary of State may determine that regulation 10 does not apply in those circumstances.

Provision of information by suppliers

12.—(1) The Secretary of State may direct scheme electricity suppliers to provide information to the Secretary of State, or a person providing services to the Secretary of State, about their E&W domestic customers for the purpose of facilitating the exercise of the power in regulation 8(1).

(2) A direction under paragraph (1)—

(a) must be given to all scheme electricity suppliers to whom information may be disclosed under section 36(1) of the Digital Economy Act 2017, and

(b) may only be given if—

(i) regulations are in force under section 142 of the Pensions Act 2008 and those regulations authorise the scheme electricity supplier to disclose to the Secretary of State the information specified in the direction, or

(ii) the scheme electricity supplier is authorised by section 37 of the Digital Economy Act 2017 to disclose to the Secretary of State the information specified in the direction.

(3) A direction under paragraph (1)—

(a) must specify the information to be provided;

(b) must specify the date on, or by, which the information is to be provided;

(c) may specify the form in which the information is to be provided.

(4) A scheme electricity supplier must comply with a direction under paragraph (1).

(5) A scheme electricity supplier must notify the Secretary of State if a rebate notice given to the supplier specifies a person—

(a) who is not a core group customer, or

(b) whom the supplier is unable to identify as a core group customer.

(6) A supplier must give the notice under paragraph (5) before the end of the period of 30 days beginning with the day on which it receives the rebate notice.

(7) If, in relation to a scheme year, a scheme electricity supplier does not provide the prescribed rebate to any core group customer, the supplier must, before the end of the specified period, notify the Authority of—

(a) the number of core group customers to whom the supplier has not provided the rebate,

(b) the reasons why the supplier has not provided the rebate to those customers, and

(c) any steps taken by the supplier to attempt to provide the rebate to those customers.

(8) A scheme electricity supplier must, before the end of the specified period, notify the Authority of the number of prescribed rebates provided, or treated as being provided, by the supplier under this Part in the scheme year which are undelivered as at the date of the notification.

(9) For the purposes of this regulation—

(a) “the specified period”, in relation to a scheme year, means the period of five months beginning with 1st April immediately following the end of the scheme year;

(b) a prescribed rebate is undelivered if—

(i) the rebate was provided to a customer by tendering payment of the amount of the prescribed rebate to the customer, and the customer has not accepted the payment, or

(ii) the rebate was provided to a customer who pre-pays for electricity or gas with credit to the amount of the prescribed rebate against the cost of future electricity or gas use, and the customer has not accepted that credit.

Provision of information by the Secretary of State

13.  The Secretary of State must, in respect of each scheme electricity supplier, notify the Authority as soon as reasonably practicable after the end of each scheme year of—

(a) the number of persons specified in rebate notices given to the supplier during the scheme year, and

(b) the number of those persons in respect of whom the supplier has notified the Secretary of State under regulation 12(5).

Interpretation of Part 3: references to the Secretary of State

14.—(1) In this Part, other than in the provisions specified in paragraph (2), references to the Secretary of State include a person providing services to the Secretary of State.

(2) The provisions mentioned in paragraph (1) are—

(a) regulation 9;

(b) regulation 11;

(c) regulation 12(1).

PART 4 Non-Core Spending

CHAPTER 1 Determination etc. of non-core spending obligation

Determination and notification of aggregate non-core spending obligation

15.—(1) The Secretary of State must determine and notify the Authority of the aggregate non-core spending obligation—

(a) for scheme year 12, on or before the 7th day after the commencement day;

(b) for scheme years 13, 14 and 15, by 14th February preceding the start of the scheme year.

(2) Schedule 1 makes provision for the determination of the aggregate non-core spending obligation.

Duty to calculate and adjust, and notify, compulsory scheme electricity suppliers’ non-core spending obligations

16.—(1) The Authority must—

(a) calculate, in accordance with regulation 17, the non-core spending obligation for each compulsory scheme electricity supplier for each scheme year, and

(b) adjust each supplier’s non-core spending obligation for a scheme year in accordance with—

(i) for scheme year 12, regulation 18; or

(ii) for any other scheme year, regulation 19.

(2) The Authority must notify each compulsory scheme electricity supplier—

(a) of its non-core spending obligation for each scheme year;

(b) whether any adjustment is made to its obligation for a scheme year in accordance with regulation 18 or 19;

(c) if such an adjustment is made, of the adjusted amount of its non-core spending obligation for that scheme year.

(3) The notification under paragraph (2)(a) must be given—

(a) for scheme year 12, on or before the 25th working day after the commencement day;

(b) for any other scheme year, by 14th March preceding the start of the scheme year.

(4) The notification under paragraph (2)(b) and, as the case may be, (c) must be given by 31st October in the scheme year to which it relates.

Calculation of non-core spending obligation

17.—(1) The non-core spending obligation of a compulsory scheme electricity supplier (“ C”) for a scheme year, subject to any adjustments under regulation 18 or 19, is—

(a) where the Secretary of State adjusts the initial overall spending target for the scheme year in accordance with paragraph 4(3) or (4) of Schedule 1—

(i) A, if C is not a relevant supplier;

(ii) A + B, if C is a relevant supplier and the initial overall spending target is increased in accordance with paragraph 4(3) of Schedule 1;

(iii) A – B, if C is a relevant supplier and the initial overall spending target is reduced in accordance with paragraph 4(4) of Schedule 1;

(b) otherwise, C’s obligation percentage of the aggregate non-core spending obligation for the scheme year.

(2) For the purposes of paragraph (1)(a)—

(a) “A” is C’s obligation percentage for the scheme year of the amount which would have been the aggregate non-core spending obligation if the adjustment under paragraph 4(3) or (4) (as the case may be) of Schedule 1 had not been made;

(b) “B” is—

(i) if the scheme year is scheme year 12, C’s relevant percentage (as determined under regulation 13(2) of the 2011 Regulations for scheme year 11) of the amount by which the initial overall spending target for scheme year 12 is adjusted in accordance with paragraph 4(3) or (4) of Schedule 1;

(ii) otherwise, C’s obligation percentage for the preceding scheme year of the amount by which the initial overall spending target for the scheme year is adjusted in accordance with paragraph 4(3) or (4) of Schedule 1.

(3) For the purposes of this regulation, “the obligation percentage” in relation to C and a scheme year is—

Where

(a)

“X” is the relevant number of GB domestic customers, and

(b)

“Y” is the total number of GB domestic customers of—

(i)

all compulsory scheme electricity suppliers, and

(ii)

all scheme gas suppliers who are connected to a compulsory scheme electricity supplier.

(4) For the purposes of paragraph (3)(a), the relevant number of GB domestic customers is—

(a) if C is connected to one or more scheme gas suppliers but is not connected to any other compulsory scheme electricity suppliers, the combined number of GB domestic customers of C and its connected scheme gas suppliers;

(b) if C is connected to one or more scheme gas suppliers and to one or more other compulsory scheme electricity suppliers, a number equal to C% of (CE + CG) where—

(i) “C%” is C’s number of GB domestic customers as a percentage of CE;

(ii) “CE” is the combined number of—

(aa) C’s number of GB domestic customers, and

(bb) the number of GB domestic customers of C’s connected compulsory scheme electricity suppliers;

(iii) “CG” is the number of GB domestic customers of C’s connected scheme gas suppliers;

(c) otherwise, C’s number of GB domestic customers.

(5) For the purposes of paragraphs (3) and (4)—

(a) a reference to a supplier’s number of GB domestic customers is a reference to the supplier’s number of GB domestic customers on 31st December preceding the start of the scheme year;

(b) a supplier is to be treated as connected to another supplier only if they were connected on that date.

(6) In this regulation “relevant supplier” means—

(a) in relation to scheme year 12, a compulsory scheme electricity supplier (within the meaning given in regulation 5(1) of the 2011 Regulations) in relation to scheme year 11;

(b) in relation to any other scheme year, a compulsory scheme electricity supplier in relation to the preceding scheme year.

Adjustment of non-core spending obligation: scheme year 12

18.—(1) The adjustments that must be made to the non-core spending obligation for scheme year 12 (“ O”) of a compulsory scheme electricity supplier (“C”) are as follows.

(2) O must be adjusted in accordance with paragraph (3) or (4) if I is less than or exceeds S where—

(a) “I” is the amount of spending incurred by C under Part 4 of the 2011 Regulations in scheme year 11 (as determined by the Authority in accordance with regulation 29(1)(d) of those Regulations);

(b) “S” is C’s non-core spending obligation under that Part of those Regulations for scheme year 11, as adjusted (where required) in accordance with regulation 14 of those Regulations.

(3) If I is less than S, O must be adjusted by adding an amount equal to 90.6% of (S − I).

(4) If I exceeds S, O must be adjusted by subtracting the lesser of—

(a) an amount equal to 90.6% of (I − S), and

(b) an amount equal to 90.6% of the overspend amount.

(5) For the purposes of paragraph (4) “the overspend amount” is—

(a) 5% of S, or

(b) where C notified the Authority of their intention to meet all or part of a failed supplier’s non-core spending obligation in accordance with regulation 30A of the 2011 Regulations in scheme year 11, 10% of S.

(6) Whether or not an adjustment is made under paragraph (2), O must be adjusted by adding an amount equal to 90.6% of the undelivered rebate amount.

(7) For the purposes of paragraph (6) “the undelivered rebate amount” is £140 multiplied by—

(a) where C has made a notification under regulation 9(7) of the 2011 Regulations in respect of scheme year 11, the number of prescribed rebates as stated in that notification, and

(b) where C has made a notification under regulation 14(3A) of the 2011 Regulations in respect of scheme year 11, the number of prescribed rebates as stated in that notification.

Adjustment of non-core spending obligation: scheme years 13 to 15

19.—(1) The adjustments that must be made to the non-core spending obligation for a scheme year (other than scheme year 12) (“ O”) of a compulsory scheme electricity supplier (“C”) are as follows.

(2) O must be adjusted in accordance with paragraph (3) or (4) if I is less than or exceeds S where—

(a) “I” is the amount of spending incurred by C under this Part (as determined by the Authority in accordance with regulation 27) in the preceding scheme year;

(b) “S” is C’s non-core spending obligation for the preceding scheme year as adjusted for that year, where required, in accordance with regulation 18 or this regulation.

(3) If I is less than S, O must be adjusted by adding (S − I).

(4) If I exceeds S, O must be adjusted by subtracting the lesser of—

(a) (I − S), and

(b) the relevant amount.

(5) For the purposes of paragraph (4) “the relevant amount” is—

(a) 5% of S, or

(b) where C notified the Authority of their intention to meet all or part of a failed supplier’s non-core spending obligation in accordance with regulation 29, 10% of S.

(6) Whether or not an adjustment is made under paragraph (2), O must be adjusted by adding an amount equal to the undelivered rebate amount.

(7) For the purposes of paragraph (6) “the undelivered rebate amount” is £150 multiplied by, where C has made a notification under regulation 12(8) in respect of the preceding scheme year, the number of prescribed rebates as stated in that notification.

CHAPTER 2 Obligation to incur spending etc.

Obligation to incur spending and amounts of spending

20.—(1) In each scheme year, a compulsory scheme electricity supplier must incur spending under this Part to the amount of its non-core spending obligation.

(2) In doing so, the supplier—

(a) must include spending under Chapter 3 (industry initiatives), subject to the requirements and limits in paragraphs (3) to (5);

(b) may include spending under Chapter 4 (activities specified by the Secretary of State).

(3) Where the aggregate non-core spending obligation for the scheme year exceeds £10 million, the amount of spending on financial assistance under regulation 21 which a supplier counts towards its non-core spending obligation—

(a) must be no less than the obligation percentage of £5 million, but

(b) must not, in total, exceed the obligation percentage of £10 million.

(4) Where the aggregate non-core spending obligation for the scheme year exceeds £6 million, the amount of spending on debt write-off under regulation 21 which a supplier counts towards its non-core spending obligation—

(a) must not exceed the obligation percentage of £3 million in respect of customers who are supplied with neither electricity or gas through a pre-payment meter;

(b) must not, in total, exceed the obligation percentage of £6 million.

(5) Where the aggregate non-core spending obligation for the scheme year exceeds £8 million, the amount of spending on the installation of boilers or central heating systems under regulation 21 which a supplier counts towards its non-core spending obligation must not in total exceed the obligation percentage of £8 million.

(6) In this regulation—

“financial assistance” means the activity listed in the final entry in the table in Part 1 of Schedule 2;

“obligation percentage”, in relation to a supplier, means the percentage determined in accordance with paragraph (3) of regulation 17.

(7) This regulation is subject to regulations 23 and 24.

CHAPTER 3 Industry initiatives

Spending on industry initiatives by a compulsory scheme electricity supplier

21.—(1) A compulsory scheme electricity supplier may in respect of a scheme year count towards its non-core spending obligation spending (excluding Value Added Tax) incurred in that scheme year on an activity of a kind listed in the table in Part 1 of Schedule 2 (an “industry initiative”) by—

(a) the supplier, or

(b) a connected gas supplier, to the extent permitted by regulation 23.

(2) But spending on an industry initiative does not count towards a supplier’s non-core spending obligation if the spending—

(a) is incurred pursuant to a requirement in—

(i) any other enactment, or

(ii) an electricity supply or gas supply licence,

(b) is counted by a scheme supplier towards a spending obligation or target imposed by—

(i) any other enactment, or

(ii) an electricity supply or gas supply licence, or

(c) falls within any exception in the table in Part 1 of Schedule 2.

(3) In addition, spending on an industry initiative does not count towards a supplier’s non-core spending obligation unless—

(a) the industry initiative has been notified to the Authority, and

(b) either—

(i) the spending takes place after the Authority approves the initiative, or

(ii) in relation to scheme year 12, the spending takes place before the Authority decides whether to approve the initiative but the Authority subsequently approves it.

Approval of industry initiatives

22.—(1) A compulsory scheme electricity supplier must notify the Authority of the industry initiatives which it, or any connected scheme gas supplier, proposes to carry out.

(2) A supplier may—

(a) make a notification for the purposes of one or more scheme years;

(b) make more than one notification in respect of a scheme year.

(3) The Authority must approve a supplier’s notification if, but only if, it is satisfied that the supplier’s proposed industry initiatives—

(a) meet the criteria specified in the relevant entry in the first column of the table in Part 1 of Schedule 2, and do not fall within the exceptions in the corresponding entry in the second column of the table,

(b) ensure, so far as reasonably practicable, that every E&W domestic customer provided with benefits under the industry initiatives will be provided with energy advice and smart meter advice,

(c) include adequate measures to ensure, so far as reasonably practicable, that benefits provided under the industry initiatives will be provided wholly or mainly to persons in fuel poverty or in a fuel poverty risk group, and

(d) will provide value for money.

Spending on industry initiatives which may be treated as incurred by a compulsory scheme electricity supplier

23.—(1) This regulation applies where a compulsory scheme electricity supplier (“ C”) is connected to one or more scheme gas suppliers on the qualifying date (referred to in this regulation as a “connected scheme gas supplier”).

(2) For the purposes of this regulation, the qualifying date is 31st December preceding the start of the scheme year.

(3) If C is not connected to any other compulsory scheme electricity supplier on the qualifying date, C may treat any amount of spending incurred under regulation 21 by a connected scheme gas supplier in the relevant scheme year as an amount of spending incurred by C in that scheme year.

(4) If C is connected to one or more compulsory scheme electricity suppliers on the qualifying date (referred to in this regulation as a “connected compulsory scheme electricity supplier”), C may treat the specified percentage of any amount of spending incurred under regulation 21 by a connected scheme gas supplier in the relevant scheme year as an amount of spending incurred by C in that scheme year.

(5) For the purposes of paragraph (4), the “specified percentage” is C’s number of GB domestic customers on the qualifying date as a percentage of the combined number of GB domestic customers of—

(a) C, and

(b) C’s connected compulsory scheme electricity suppliers,

on that date.

Spending incurred by a compulsory scheme electricity supplier before the commencement day

24.  In scheme year 12, a compulsory scheme electricity supplier may treat as an amount of spending incurred under regulation 21 any spending which—

(a) was incurred between 1st April 2022 and the commencement day, and

(b) would have counted towards its non-core spending obligation by virtue of regulations 20 to 23, if these Regulations had come into force on 1st April 2022.

CHAPTER 4 Specified activities

Types of spending: activities specified by the Secretary of State

25.—(1) A compulsory scheme electricity supplier may, in respect of any scheme year, count towards its non-core spending obligation financial contributions (excluding Value Added Tax) made by the supplier in the scheme year to fund a specified activity.

(2) A “specified activity” is an activity specified in a notice published by the Secretary of State.

(3) The Secretary of State may only specify an activity in a notice if the Secretary of State is satisfied that—

(a) the funding of the activity is open to contributions from any compulsory scheme electricity supplier,

(b) the activity is of a kind listed in the first column of the table in Part 1 of Schedule 2, and does not fall within an exception in the second column of the table,

(c) the activity includes adequate measures to ensure, so far as reasonably practicable, that—

(i) every E&W domestic customer provided with benefits under the activity will be provided with energy advice and smart meter advice, and

(ii) benefits provided under the activity will be provided wholly or mainly to persons in fuel poverty or in a fuel poverty risk group, and

(d) the activity will provide value for money.

(4) But financial contributions made to fund a specified activity do not count towards a supplier’s non-core spending obligation if they are—

(a) made pursuant to a requirement in—

(i) any other enactment, or

(ii) an electricity supply or gas supply licence, or

(b) counted by a scheme supplier towards a spending obligation or target imposed by—

(i) any other enactment, or

(ii) an electricity supply or gas supply licence.

(5) In addition, financial contributions to fund a specified activity may count towards a supplier’s non-core spending obligation only if they are made after the Secretary of State has published the notice specifying the activity.

PART 5 Authority functions

Approvals by the Authority: procedure

26.—(1) This regulation applies to notifications to the Authority under regulation 6(6) or 22.

(2) A notification must be in such form, and contain such information, as the Authority may require.

(3) The Authority must, before the end of the specified period—

(a) notify the supplier of its decision, or

(b) if the Authority requires further information from the supplier before approving the notification, request that information from the supplier.

(4) For the purposes of paragraph (3) “the specified period” is—

(a) 12 weeks after the commencement day, if the notification is received by the Authority before the end of the period of eight weeks beginning with the commencement day;

(b) otherwise, 20 working days after receipt of the notification.

(5) When a supplier replies to a request for further information, the Authority must before the end of the period of 20 working days beginning with the day on which the Authority receives the reply—

(a) notify the supplier of its decision, or

(b) if the Authority still requires further information from the supplier before approving the notification, request that information from the supplier.

(6) If the Authority refuses to approve a supplier’s notification, or part of a notification, the Authority must give reasons for its refusal.

Determination of amounts spent by scheme suppliers

27.—(1) The Authority must in respect of each scheme year, as soon as reasonably practicable after the end of the scheme year, determine—

(a) the total amount of rebates provided in the scheme year, or treated as being provided in the scheme year, by each scheme electricity supplier under Part 3;

(b) the total amount of spending on industry initiatives under Part 4 incurred, or treated as incurred, by each compulsory scheme electricity supplier which that supplier may count towards its non-core spending obligation for the scheme year;

(c) the total amount of spending on specified activities under Chapter 4 of Part 4 incurred by each compulsory scheme electricity supplier which that supplier may count towards its non-core spending obligation for the scheme year.

(2) The Authority must in respect of each scheme year, as soon as reasonably practicable after the end of the scheme year, estimate for each compulsory scheme electricity supplier the proportion, expressed as a percentage—

(a) of—

(i) the total amount of spending mentioned in paragraph (1)(b), and

(ii) the amount of spending on each industry initiative for the scheme year,

which was incurred by, or treated as incurred by, the supplier in relation to households which meet the condition in paragraph (3), and

(b) of—

(i) the total amount of spending mentioned in paragraph (1)(c), and

(ii) the amount of spending on each specified activity for the scheme year,

which was incurred by the supplier in relation to households which meet the condition in paragraph (3).

(3) A household meets the condition in this paragraph if at least one person living in the household has significant health problems or a disability.

Provision of information to the Authority

28.—(1) The Authority may request that a scheme supplier provide it with such information as the Authority requires for the purposes of carrying out its functions in relation to the Scheme.

(2) A request under paragraph (1)—

(a) must specify the date by which the information is to be provided, and

(b) may specify the form in which the information is to be provided.

(3) A scheme supplier must comply with a request under paragraph (1).

Provision of information by the Authority

29.—(1) The Authority must notify the Secretary of State if—

(a) the Authority is notified by a supplier of last resort of that supplier’s intention to meet all or part of a failed supplier’s non-core spending obligation for a scheme year, and

(b) that notification is made on or before 15th February in that scheme year.

(2) A notification under paragraph (1) must be given by the Authority as soon as reasonably practicable after it is notified by the supplier of last resort.

(3) For the purposes of this regulation—

(a) a “supplier of last resort” is a compulsory scheme electricity supplier who is given a direction (a “last resort supply direction”) by the Authority to take over responsibility for the supply of electricity to another person’s GB domestic customers, and

(b) a “failed supplier” is a person in respect of whose GB domestic customers the Authority gives a last resort supply direction.

PART 6 Review

Reviews of the Scheme

30.—(1) The Secretary of State must conduct a review of the Scheme, or any aspect of the Scheme, if the Secretary of State is satisfied that a review would be desirable in order to achieve greater reductions in fuel poverty or because—

(a) the Scottish Ministers have consulted, or are consulting, the Secretary of State in accordance with section 14A(5)(a) of the Energy Act 2010(20), or

(b) there has been a significant change in circumstances since the commencement day.

(2) The Secretary of State must conduct a review of regulation 6 if the Secretary of State is satisfied that a review would be desirable in order to—

(a) promote effective competition between suppliers, or

(b) protect the interests of GB domestic customers.

(3) The Secretary of State must conduct a review of any aspect of the Scheme if the Secretary of State is satisfied that a review would be desirable—

(a) to protect the interests of GB domestic customers who have significant health problems or a disability and who are in fuel poverty or in a fuel poverty risk group,

(b) because that aspect of the Scheme is not, or may not be, operating effectively, or

(c) because the effectiveness of that aspect of the Scheme could be improved.

PART 7 Amendment of the Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011

Amendment of the Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011

31.—(1) The Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011(21) are amended as follows.

(2) In regulation 1—

(a) in the heading, for “and commencement” substitute “, commencement and application”;

(b) after paragraph (2), insert—

“(3) Regulation 2(3) to (6) applies only in relation to England and Wales.”.

(3) In regulation 2 (interpretation)—

(a) in paragraph (1)—

(i) for the definition of “domestic customer” substitute—

““domestic customer”—

(a)

in relation to England and Wales, means an owner or occupier of domestic premises in England or Wales who is supplied with electricity at those premises wholly or mainly for domestic purposes;

(b)

in relation to Scotland, means an owner or occupier of domestic premises in Great Britain who is supplied with electricity at those premises wholly or mainly for domestic purposes;”;

(ii) in the definition of “information direction” after “WHD Regulations” insert “or regulation 12(1) of the WHD (E&W) Regulations”;

(iii) for the definition of “scheme year” substitute—

““scheme year”—

(a)

in relation to England and Wales, has the meaning given in regulation 3(1) of the WHD (E&W) Regulations;

(b)

in relation to Scotland, has the meaning given in regulation 2(1) of the WHD Regulations;”;

(iv) omit the definition of “Warm Home Discount scheme”;

(v) after the definition of “the WHD Regulations”, insert—

““the WHD (E&W) Regulations” means the Warm Home Discount (England and Wales) Regulations 2022;”;

(b) after paragraph (2) insert—

“(3) Paragraph (4) applies where an individual (“I”) who would normally—

(a) occupy domestic premises in England and Wales,

(b) be a member of the same household as another person, or

(c) live together with another person as if they were married or civil partners,

is staying in hospital or residing in a care home or hospice.

(4) Where this paragraph applies, I is to be treated for the purposes of these Regulations as continuing to occupy the relevant premises, or be a member of the relevant household or (as the case may be) live together with the relevant person, if—

(a) where I is staying in hospital, the duration of I’s stay has not exceeded 52 weeks from the date on which I was admitted;

(b) where I is residing in a hospice or care home, I’s residence there is temporary.

(5) For the purposes of paragraphs (3) and (4), “care home” and “hospice” have the meanings given by regulation 2(8) of the WHD (E&W) Regulations.

(6) For the purposes of these Regulations, where—

(a) an individual (“I”) is an occupier of domestic premises at which electricity is supplied for domestic purposes, and

(b) because I lacks the necessary capacity to arrange that supply, the electricity is supplied at those premises to another person (“A”) who is not I’s partner (whether or not A is also an owner or occupier of those premises),

I is to be treated as the person who is supplied with electricity at those premises.”.

(4) In regulation 3 (meaning of qualifying customer)—

(a) in paragraph (1), for sub-paragraph (c) substitute—

“(c) the relevant condition is met.”;

(b) after paragraph (1), insert—

“(1A) In this regulation “the relevant condition” means—

(a) in relation to England and Wales, the condition in paragraph (1B);

(b) in relation to Scotland, the condition in paragraph (2).

(1B) The condition in this paragraph is met if the domestic customer or the customer’s partner—

(a) is in receipt of a guarantee credit or a savings credit (or both) on the relevant date, or

(b) is—

(i) entitled to a guarantee credit or a savings credit (or both) on the relevant date, and

(ii) in receipt of that guarantee credit or savings credit, or, if they are entitled to both, at least one of those credits, on the date on which relevant information in relation to them is supplied by the Secretary of State pursuant to regulation 5(1)(b).”.

(5) In regulation 5 (disclosure of social security information by the Secretary of State)—

(a) in paragraph (1)—

(i) in sub-paragraph (a), after “those Regulations” insert “or, as the case may be, a rebate notice (within the meaning given in regulation 8(1) of the WHD (E&W) Regulations)”;

(ii) in sub-paragraph (b), after “that rebate”, insert “in accordance with the WHD Regulations or, as the case may be, the prescribed rebate in accordance with the WHD (E&W) Regulations”;

(b) in paragraph (2), after “WHD Regulations” insert “or, as the case may be, the WHD (E&W) Regulations”.

Callanan

Parliamentary Under Secretary of State

Department for Business, Energy and Industrial Strategy

29th June 2022

We consent

Alan Mark

Rebecca Harris

Two of the Lords Commissioners of Her Majesty’s Treasury

6th July 2022