The Warm Home Discount (England and Wales) Regulations 2022

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.