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 08 August 2007
Confident Consumers - A Fair Deal creating Prosperity & Success for All
 
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Energy Administrative Regime

A special administration regime was introduced in the Energy Act 2004 to secure and maintain the supply of energy to consumers across GB in the unlikely event that a 'protected' energy company (i.e. company carrying out a monopoly function involving the transmission or distribution of electricity, or the conveyance of gas, using various national and regional energy networks) becomes insolvent.  The Energy Administration regime will only apply to protected energy companies because they are vital to the security of energy to consumers. The impact of one or more of these companies being unable to fulfil their operation as a result of an insolvency, would be detrimental to consumers, both commercial and domestic.

There are three elements to the Energy Administration policy:

  • the Special Administration regime established through primary legislation in the Energy Act 2004
  • the Energy Administration Rules - provides the detailed information on how an energy administration  must  be conducted
  • the Cost Recovery Mechanism - will enable the Secretary of State to recover certain monies that may have been made to a protected energy company that encountered a shortfall while in energy administration

The Energy Administration (England and Wales) Rules 2005 apply only to protected energy companies in England and Wales and came into force in October 2005. The Energy Administration (Scotland) Rules 2006 apply only to protected energy companies in Scotland and came into force in March 2006. The respective Orders and Rules can be found on the Office of Public Sector Information website under 'External Links'.

The cost recovery mechanism came into force in April 2006. The notifications on behalf of the Secretary of State are available under 'Related Documents'.

The Government Response document to the consultation process contains the final RIA, final licence modifications and industry guidance are also available under 'Related Documents'.

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