Exhibit 4.3

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ANNEX 1

ELECTRICITY ACT 1989SECTION 6(1)(c)

ELECTRICITY DISTRIBUTION LICENCE {TC ANNEX 1THE DISTRIBUTION LICENCE \l 9 \* MERGEFORMAT}

FOR

NORWEB PLC



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|PART I  TERMS OF THE LICENCE                                                    | 
|-------------------------------------------------------------------------------- | 
|                                                                                 | 
|PART II  THE STANDARD CONDITIONS                                                | 
|                                                                                 | 
|PART III  AMENDMENTS TO STANDARD
      CONDITIONS                               | 
|                                                                                 | 
|PART IV  SPECIAL CONDITIONS                                                     | 
|                                                                                 | 
|SPECIAL CONDITION B  RESTRICTION
      OF DISTRIBUTION CHARGES                  | 
|                                                                                 | 
|SPECIAL CONDITION C  RESTRICTION
      OF DISTRIBUTION CHARGES: ADJUSTMENTS     | 
|                                                                                 | 
|SPECIAL CONDITION D  INFORMATION
      TO BE PROVIDED TO THE AUTHORITY          | 
|                                                                                 | 
|SPECIAL CONDITION E  ALLOWANCE IN
      RESPECT OF SECURITY COSTS               | 
|                                                                                 | 
|SPECIAL CONDITION F  DURATION OF
      CHARGE RESTRICTION CONDITIONS            | 
|                                                                                 | 
|SCHEDULE A  SUPPLEMENTARY PROVISIONS
      OF THE CHARGE RESTRICITION CONDITONS | 
|                                                                                 | 
|SCHEDULE 1  SPECIFIED AREA                                                      | 
|                                                                                 | 
|SCHEDULE 2  REVOCATION                                                          | 
|                                                                                 | 
|SCHEDULE 3  DISTRIBUTION SERVICES
      AREA                                    | 
|                                                                                 | 







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PART I  TERMS OF THE LICENCE

|1. | This licence, treated as granted under section 6(1)(c) of the electricity act 1989 (the act), authorises NORWEB plc (a company registered in England and Wales under number 2366949) (the licensee) whose registered office is situated at Dawson House, Great Sankey, Warrington, Cheshire WA5 3LW to distribute electricity for the purpose of giving a supply to any premises in the specified area in schedule 1 or enabling a supply to be so given during the period specified in paragraph 3 below, subject to:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | the standard conditions of electricity distribution licences referred to in Part II below, which shall have effect in the licence subject to such amendments (if any) as are set out in Part III below (together the conditions);

| |     |                                                                                     
| | --- | ------------------------------------------------------------------------------------
| | (b) | the special conditions, if any, set out in Part IV below (the special conditions);

| |     |                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------
| | (a) | such Schedules hereto, if any, as may be referenced in the conditions, the special conditions or the terms of the licence.

|   |                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | This licence is subject to transfer, modification or amendment in accordance with the provisions of the Act, the special conditions or the conditions.

|   |                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | This licence, unless revoked in accordance with the terms of Schedule 2, shall continue until determined by not less than 25 years notice in writing given by the Authority to the licensee.

|   |                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | The provisions of section 109(1) of the Act (Service of documents) shall have effect as if set out herein as if for the words this Act there were substituted the words this licence.

|   |                                                                                                                                                                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | Without prejudice to sections 11 and 23(1) of the Interpretation Act 1978, Part I to IV inclusive of, and the Schedules to, this licence shall be interpreted and construed in like manner as an Act of Parliament passed after the commencement of the Interpretation Act 1978.

|   |                                                                                                   
|-- | --------------------------------------------------------------------------------------------------
|6. | References in this licence to a provision of any enactment, where after the date of this licence 

| |     |                                                                          
| | --- | -------------------------------------------------------------------------
| | (a) | the enactment has been replaced or supplemented by another enactment, and

| |     |                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------
| | (b) | such enactment incorporates a corresponding provision in relation to fundamentally the same subject matter,

| |                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------
| | shall be construed, so far as the context permits, as including a reference to the corresponding provision of that other enactment.

|   |                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | Pursuant to paragraph 5 of standard condition 2 (Application of Section C (Distribution Services Obligations)) of the Electricity Distribution Licence the distribution services area is specified in Schedule 3 hereto.

|                                                                                                                                                                                                                                                                            | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Pursuant
        to a licensing scheme made by the Secretary of State under Part II of
        Schedule 7 to the Utilities Act 2000 on 28 September 2001 this licence
        was made and is treated as granted under section 6(1)(c) of the Electricity
        Act 1989.



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PART II  THE STANDARD CONDITIONS

Standard conditions in effect in this licence

|Section
        A            |  |  | Section B                  |  |  | Section C                   | 
|---------------------------- |  |  | -------------------------- |  |  | --------------------------- | 
|                             | 
|Standard
        condition 1 |  |  | Standard condition
      4 |  |  | Standard condition
      32 | 
|                             | 
|Standard
        condition 2 |  |  | Standard condition 4A      |  |  | Standard condition 32A      | 
|                             | 
|Standard
        condition 3 |  |  | Standard condition 4B      |  |  | Standard condition 34       | 
|                             | 
|                             |  |  | Standard condition 4C      |  |  | Standard condition 35       | 
|                             | 
|                             |  |  | Standard condition 5       |  |  | Standard condition 36       | 
|                             | 
|                             |  |  | Standard condition 6       |  |  | Standard condition 36A      | 
|                             | 
|                             |  |  | Standard condition 7       |  |  | Standard condition 36B      | 
|                             | 
|                             |  |  | Standard condition 8       |  |  | Standard condition 36C      | 
|                             | 
|                             |  |  | Standard condition 9       |  |  | Standard condition 37       | 
|                             | 
|                             |  |  | Standard condition 9A      |  |  | Standard condition 38       | 
|                             | 
|                             |  |  | Standard condition 10      |  |  | Standard condition 39       | 
|                             | 
|                             |  |  | Standard condition 11      |  |  | Standard condition 40       | 
|                             | 
|                             |  |  | Standard condition 12      |  |  | Standard condition 41       | 
|                             | 
|                             |  |  | Standard condition 12A     |  |  | Standard condition 42       | 
|                             | 
|                             |  |  | Standard condition 13      |  |  | Standard condition 42A      | 
|                             | 
|                             |  |  | Standard condition 14      |  |  | Standard condition 43       | 
|                             | 
|                             |  |  | Standard condition 15      |  |  | Standard condition 44       | 
|                             | 
|                             |  |  | Standard condition 16      |  |  | Standard condition 45       | 
|                             | 
|                             |  |  | Standard condition 17      |  |  | Standard condition 46       | 
|                             | 
|                             |  |  | Standard condition 18      |  |  | Standard condition 47       | 
|                             | 
|                             |  |  | Standard condition 19      |  |  | Standard condition 48       | 
|                             | 
|                             |  |  | Standard condition 20      |  |  | Standard condition 49       | 
|                             | 
|                             |  |  | Standard condition 21      |  |  |                             | 
|                             | 
|                             |  |  | Standard condition 22      |  |  |                             | 
|                             | 
|                             |  |  | Standard condition 23      |  |  |                             | 
|                             | 
|                             |  |  | Standard condition 24      |  |  |                             | 
|                             | 
|                             |  |  | Standard condition 25      |  |  |                             | 
|                             | 
|                             |  |  | Standard condition 26      |  |  |                             | 
|                             | 
|                             |  |  | Standard condition 29      |  |  |                             | 
|                             | 

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Note:
        A copy of the current standard conditions of electricity distribution
        licences can be inspected at the principal office of the Authority. The
        above list is correct at the date of this licence but may be changed by
        subsequent amendments or modifications to the licence. The authoritative
        up-to-date version of this licence is available for public inspection
        at the principal office of the Authority.



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|                                                      
|------------------------------------------------------
|PART III  AMENDMENTS
      TO THE STANDARD CONDITIONS

|                                                                                              
|----------------------------------------------------------------------------------------------
|There are no amendments to
      the standard conditions of electricity distribution licences.











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| |                             
| | ----------------------------
| | PART IV  SPECIAL CONDITIONS

|                                                           
|-----------------------------------------------------------
|Special Condition
        A: Definitions and interpretation

|   |                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Unless the context otherwise requires, words and expressions used in the standard conditions of this licence shall bear the same meaning in these Special Conditions.

|   |                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Special Conditions B to F and Schedule A to those Conditions shall only apply to the distribution services area (as defined in standard condition 1 (Definitions and Interpretation)) of the licensee.

|   |                                                                 
|-- | ----------------------------------------------------------------
|3. | In Special Conditions B to F and Schedule A to those Conditions:

| |              |                                                                                                                                                                                                                                                                                                       
| | ------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | attributed | means when used in relation to transmission connection point charges or remote transmission asset rentals or distribution losses, attributed in accordance with the principles set out in Part A of Schedule A and attribute, attributed, attributable and attribution shall be construed accordingly.

| |                                             |                                                                                                                                
| | ------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------
| | average charge per
      unit distributed | means the distribution revenue
        in the relevant year divided by the regulated quantity distributed in
        that year.

| |                          |                                                                                                                                                                 
| | ------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | average specified rate | means the average of the daily base rates of Barclays Bank plc current from time to time during the period in respect of which the calculation falls to be made.

| |                                 |                                                                                                                                                                            
| | ------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | charge restriction conditions | means Special Conditions A to F inclusive together with Schedule A to this licence, as from time to time modified or replaced in accordance with the provisions of the Act.

| |                       |                                                                                                                                                                                    
| | --------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | distribution losses | means units on the licensees distribution system, measured as being the difference between the units metered on entry into the system and the units metered on leaving the system.

| |                        |                                                                                                                                                                
| | ---------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | distribution revenue | means the revenue (measured on an accruals basis) derived by the licensee from the provision of distribution services in the relevant year, after deduction of:

| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (i) | an amount equal to such
        part of the total amount payable in that relevant year to the transmission
        company (measured on an accruals basis) in respect of transmission connection
        point charges and remote transmission asset rentals and which would otherwise
        be included in distribution revenue by reason of being recovered in that
        relevant year by the licensee in its use of system charges, as falls to
        be attributed to the regulated quantity distributed in that relevant year;
        and



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| |  |      |                                                                                       
| |  | ---- | --------------------------------------------------------------------------------------
| |  | (ii) | value added tax (if any) and any other taxes based directly on the amounts so derived.

| |                         |                                                                                                               
| | ----------------------- | --------------------------------------------------------------------------------------------------------------
| | distribution services | means all services provided by the licensee as part of its distribution business other than excluded services.

| |                |                                                                                                                                                    
| | -------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | EHV premises | means those premises to which units are delivered by the licensee which fall to be treated as EHV premises in accordance with Part B of Schedule A.

| |             |                                                                                                       
| | ----------- | ------------------------------------------------------------------------------------------------------
| | EHV units | means units distributed by the licensee which are delivered or deemed to be delivered to EHV premises.

| |                          |                                                  
| | ------------------------ | -------------------------------------------------
| | eleventh relevant year | means the relevant year commencing 1stApril 2000.

| |                     |                                                                                                                                                               
| | ------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | excluded services | means those services provided by the licensee which in accordance with the principles set out in Part C of Schedule A fall to be treated as excluded services.

| |            |                                                                                                                                                                                          
| | ---------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | HV units | means units (other than EHV units) distributed by the licensee which are delivered to premises connected to the licensees distribution system at a voltage at or higher than 1000 volts.

| |            |                                                                                                                                                           
| | ---------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | LV units | means units distributed by the licensee which are delivered to premises connected to the licensees distribution system at a voltage less than 1000 volts.

| |             |                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | LV1 units | means LV units which are distributed by the licensee outside night-time periods to domestic premises or small premises (other than domestic premises) where the appropriate use of system charges apply different rates in night-time periods as opposed to other times of day, for the avoidance of doubt including the use of system charges under the tariffs specified in paragraph D2 of Part D of Schedule A.

| |             |                                                                                                                            
| | ----------- | ---------------------------------------------------------------------------------------------------------------------------
| | LV2 units | means LV units which are distributed by the licensee to domestic premises or small premises (other than domestic premises):



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| |  |     |                                                                                                                                                            
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (a) | During night-time periods, where the appropriate use of system charges apply different rates in night-time periods as opposed to other times of the day; or

| |  |     |                                                                                                                                               
| |  | --- | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | (b) | Where the appropriate use of system charges are incorporated into tariffs which restrict availability of supply to specified off-peak periods,

| |  |                                                                                                                                    
| |  | -----------------------------------------------------------------------------------------------------------------------------------
| |  | for the avoidance of doubt including the use of system charges under the tariffs specified in paragraph D3 of Part D of Schedule A.

| |             |                                                                                                                                                                         
| | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | LV3 units | means LV units other than LV1 and LV2 units, for the avoidance of doubt including units distributed under the tariffs specified in paragraph D4 of Part D of Schedule A.

| |                                                     |                                                                                                                                                        
| | --------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | maximum average charge
      per unit distributed | means the charge calculated
        in accordance with the formula in paragraph 1 of Special Condition B (Restriction
        of distribution charges).

| |           |                                                                                                                                                                                                                                                    
| | --------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | metered | means in relation to any quantity distributed as measured by a meter installed for such purpose or (where no such meter is installed or it is not reasonably practicable to measure the quantity by such meter) as otherwise reasonably calculated.

| |                                              |                                                                                  
| | -------------------------------------------- | ---------------------------------------------------------------------------------
| | regulated distribution unit
      category | means as the case may be
        HV units or LV1 units or LV2 units or LV3 units.

| |                                  |                                                                                                                                                                                                                                                                          
| | -------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | regulated quantity distributed | means the aggregate quantity of units distributed (for any person under use of system) by the licensee through the licensees distribution system in relevant year t metered at exit points on leaving the licensees distribution system but excluding for this purpose:

| |  |     |                                                                                                               
| |  | --- | --------------------------------------------------------------------------------------------------------------
| |  | (a) | Units distributed for the purpose of supply to premises outside the licensees distribution services area; and

| |  |     |           
| |  | --- | ----------
| |  | (b) | EHV units.

| |                 |                                                                
| | --------------- | ---------------------------------------------------------------
| | relevant year | means a financial year commencing on or after 1st April 8 1990.



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| |                   |                                                                                                                                                                                                                                                                                                                                        
| | ----------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | relevant year t | means that relevant year for the purposes of which any calculation falls to be made; relevant year t-1 means the relevant year preceding relevant year t or, in respect of the period prior to 1st April 1990, the period of 12 calendar months commencing on 1st April 1989; and similar expressions shall be construed accordingly.

| |                                    |                                                                                                                                                                                                                       
| | ---------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | remote transmission asset rental | means any rent or other periodic payment payable by the distribution business of the licensee to the transmission company in respect of remote transmission assets forming part of the licensees distribution system.

| |                                               |                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | transmission connection
      point charges | means charges levied by
        the transmission company as connection charges by direct reference to
        the number or nature of the connections between the licensees distribution
        system and the transmission system and payable by the distribution business
        of the licensee.

| |        |                       
| | ------ | ----------------------
| | unit | means a kilowatt hour.

|   |                                               
|-- | ----------------------------------------------
|3. | Any reference in these Special Conditions to 

| |     |                     
| | --- | --------------------
| | (a) | a provision thereof;

| |     |                                                                             
| | --- | ----------------------------------------------------------------------------
| | (b) | a provision of the standard conditions of electricity distribution licences;

| |     |                                                                       
| | --- | ----------------------------------------------------------------------
| | (c) | a provision of the standard conditions of electricity supply licences;

| |     |                                                                           
| | --- | --------------------------------------------------------------------------
| | (d) | a provision of the standard conditions of electricity generation licences;

| |     |                                                                                     
| | --- | ------------------------------------------------------------------------------------
| | (e) | a provision of the standard
        conditions of electricity transmission licences;

| |                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | shall, if these or the standard conditions in question come to be modified, be construed, so far as the context permits, as a reference to the corresponding provision of these or the standard conditions in question as modified.



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|                                                                                 
|---------------------------------------------------------------------------------
|Special Condition
        B: Restriction of distribution charges - See Amendments

| |              
| | -------------
| | Basic Formula

|   |                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Without prejudice to Special Condition E (Allowance in respect of security costs), the licensee shall in setting its charges for the provision of distribution services use its best endeavours to ensure that in any relevant year the average charge per unit distributed shall not exceed the maximum average charge per unit distributed calculated in accordance with the following formula:

| | 
| | 
| | 

|   |                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------
|2. | For the purposes of paragraph 1, Mdt means the maximum average charge per unit distributed in relevant year t.

| |                                       
| | --------------------------------------
| | Formula for Pdt as used in paragraph 1

|   |                                                                            
|-- | ---------------------------------------------------------------------------
|3. | For the purposes of paragraph 1, Pdt is derived from the following formula:

| | 
| | 
| | 

| |  |       
| |  | ------
| |  | where:

| |     |                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------
| | PUM | means the amount set against that term in the part of Annex A to this Condition that applies to the licensee.

| |     |                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------
| | GRt | in the eleventh relevant year has the value of 1 and in each subsequent relevant year is derived from the following formula:

| | 
| | 
| | 



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| |  |           
| |  | ----------
| |  | where [S1]

| |                                                                                                                                          | 
| | ---------------------------------------------------------------------------------------------------------------------------------------- | 
| | means the summation across
        all regulated distribution unit categories i as described in the definition
        of the term Poi .

| | Poi | means, in respect of each
        regulated distribution unit category i set out in column 1 under that
        term in the part of Annex A to this Condition which applies to the licensee,
        the value opposite that category in column 2.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------
| | Dit | means that number of units in each regulated distribution unit category i distributed in relevant year t.

| |       |                                                                                                            
| | ----- | -----------------------------------------------------------------------------------------------------------
| | Dit-1 | means that number of units in each regulated distribution unit category i distributed in relevant year t-1.

| |     |                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cdt | means a notional figure, representing the number of customers in the distribution services area (for the purpose of this term Cdt only) for each relevant year, given in the table appearing under that term in the part of Annex A to this Condition that applies to the licensee.

| |       |                                                    
| | ----- | ---------------------------------------------------
| | Cdt-1 | means the number equal to Cdt in relevant year t-1.

| |      |                                                                                                                             
| | ---- | ----------------------------------------------------------------------------------------------------------------------------
| | PIDt | in the eleventh relevant year has the value of 1 and in each subsequent relevant year is derived from the following formula:

| |  | 
| |  | 
| |  | 

| |  |      
| |  | -----
| |  | where

| |      |                                                                                                                                                                                                                                                                                                                                                                                                
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | RPIt | means the percentage change (whether of a positive or a negative value) in the arithmetic average of the Retail Price Index numbers published or determined with respect to each of the six months July to December (inclusive) in relevant year t-1 and the arithmetic average of the Retail Price Index numbers published or determined with respect to the same months in relevant year t-2.

| |     |               
| | --- | --------------
| | Xdt | shall equal 3.

| |    |                               
| | -- | ------------------------------
| | PL | means an amount equal to 2.9p.



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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ALt | means an amount (in units) representing allowed distribution losses in relevant year t, being the allowed percentage of the adjusted units distributed (calculated as provided in paragraph E5 of Part E of Schedule A) where, in respect of each relevant year t, the allowed percentage shall equal that percentage which the aggregate of adjusted distribution losses (calculated as provided in paragraphs E2 to E5 of Part E of Schedule A) over the 10 preceding relevant years bears to the aggregate of adjusted units distributed (calculated as aforesaid) over the corresponding relevant years.

| |    |                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Lt | means in respect of relevant year t, adjusted grid supply point purchases less adjusted units distributed (calculated as provided in paragraphs E2 to E5 of Part E of Schedule A).

| |      |                                       
| | ---- | --------------------------------------
| | PILt | is derived from the following formula:

| |  | 
| |  | 
| |  | 

| |  |                                                        
| |  | -------------------------------------------------------
| |  | where, for the eleventh relevant year, PILt-1 equals 1.

| |    |                                                             
| | -- | ------------------------------------------------------------
| | Dt | means the regulated quantity distributed in relevant year t.

|                                                | 
|----------------------------------------------- | 
|Formula
        for PNdt as used in paragraph 1

|   |                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | For the purposes of Paragraph 1, in the eleventh and subsequent relevant years the term PNdt shall be calculated in accordance with the following formula:

| |  | 
| |  | 
| |  | 

| |  |       
| |  | ------
| |  | where:

| |    |                                                                                                                            
| | -- | ---------------------------------------------------------------------------------------------------------------------------
| | PS | means an amount equal to £3.25 million for each of the eleventh to the fifteenth relevant years, and thereafter shall be 0.

| |    |                                                                                                                                     
| | -- | ------------------------------------------------------------------------------------------------------------------------------------
| | PR | means, in the eleventh and all subsequent relevant years, the amount given against the licensees name in Annex B to this Condition.

| |      |                                       
| | ---- | --------------------------------------
| | PIRt | is derived from the following formula:

| |  | 
| |  | 
| |  | 

| |  |                                                  
| |  | -------------------------------------------------
| |  | where for the ninth relevant year PIRt-1 equals 1



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|                                                | 
|----------------------------------------------- | 
|Formula
        for PMdt as used in Paragraph 1

|   |                                                                             
|-- | ----------------------------------------------------------------------------
|5. | For the purposes of paragraph 1, PMdt is derived from the following formula:

| |  | 
| |  | 
| |  | 

| |  |       
| |  | ------
| |  | where:

| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | RMdt | means an amount equal to the licensees relevant reduction in costs in relevant year t, resulting from the fact that the licensee has ceased to provide meter provision services and meter operation services (as defined in paragraph 1 of standard condition 36B (Requirement to Offer Terms for the Provision of Distributor Metering and Data Services)) in respect of customers in respect of whom it provided meter provision services and meter operation services at 31 March 2000. The licensees relevant reduction in costs shall be calculated in real terms, and shall be the amount, if any, by which the licensees cash operating costs (excluding costs of a non-recurring nature) of providing such services in the relevant year t fall short of its cash operating costs (excluding costs of a non-recurring nature) of providing such services in the tenth relevant year, to the extent that such shortfall is attributable to the fact that the licensee has ceased, since 31 March 2000, to provide (whether directly or through an agent acting on its behalf) meter provision services and meter operation services in respect of such customers. The licensees relevant reduction in costs shall exclude the amount of any reduction in costs in providing any services which constitute excluded services.



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|                                               | 
|---------------------------------------------- | 
|Formula
        for Kdt as used in Paragraph 1

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | For the purposes of paragraph
        1, Kdt means the correction factor per unit (whether of a positive
        or a negative value) derived, subject to paragraph 3 of Special Condition
        C (Restriction of distribution charges: adjustments), from the following
        formula: provided that the value of Kdt for the eleventh relevant
        year shall be the value of Kdt arising for that year from the
        application of the formula applicable under Licence Condition 3A of the
        Public Electricity Supply licence previously granted to NORWEB plc in
        the form of that condition in force on 31 March 2000, but adjusted by
        adding the amount of TAdt for the tenth relevant year, calculated
        by the application of the formula applicable under Licence Condition 3A
        of that Public Electricity Supply licence as then in force:

| |  | 
| |  | 
| |  | 

| |  |       
| |  | ------
| |  | where:

| |       |                                                     
| | ----- | ----------------------------------------------------
| | Rdt-1 | means the distribution revenue in relevant year t-1.

| |      |                                                               
| | ---- | --------------------------------------------------------------
| | Dt-1 | means the regulated quantity distributed in relevant year t-1.

| |       |                                                                        
| | ----- | -----------------------------------------------------------------------
| | Mdt-1 | means maximum average charge per unit distributed in relevant year t-1.

| |     |                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Idt | means that interest rate in relevant year t which is equal to, where Kdt (taking no account of Idt for this purpose) has a positive value, the average specified rate plus 4, or where Kdt (taking no account of Idt for this purpose) has a negative value, the average specified rate.



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|                                                                                                                                                                 
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------
|MODIFICATION TO THE
        ELECTRICITY DISTRIBUTION LICENCE ISSUED TO LICENCE HOLDERS HAVING A DISTRIBUTION
        SERVICES AREA SITUATED IN ENGLAND AND WALES.

|        
|--------
|SCHEDULE

|   |                                                                                                              
|-- | -------------------------------------------------------------------------------------------------------------
|1. | Paragraph 1 of special condition B (Restriction of distribution charges) shall be amended to read as follows:

| |  |                                                                                                                                                                                                                                                                                                                                                                                                  
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Without prejudice to Special Condition E (Allowance in respect of security costs), the licensee shall in setting its charges for the provision of distribution services use its best endeavours to ensure that in any relevant year the average charge per unit distributed shall not exceed the maximum average charge per unit distributed calculated in accordance with the following formula:

| | 
| | 
| | 

|   |                                                                                                                                 
|-- | --------------------------------------------------------------------------------------------------------------------------------
|2. | In special condition B (Restriction of distribution charges), the following new paragraph 7 shall be inserted after paragraph 6:

| |  |                                                
| |  | -----------------------------------------------
| |  | Formula for LFdt
        as used in Paragraph 1

| |    |                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 7. | For the purposes of paragraph 1, for the tenth and preceding relevant years LFdt shall be zero, and for any subsequent relevant year LFdt is derived from the following formula:

| |  | 
| |  | 
| |  | 

| |        | 
| | ------ | 
| | where:

| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | LPdt | means an amount equal to the payments made by the licensee, in the relevant year t, in accordance with its obligations set out in Standard Licence Condition 3 or in respect of the eleventh relevant year attributed to the distribution business of the predecessor company of the licence holder in respect of payments made to the Director General of Electricity Supply under the licence condition entitled Payment of fees in the public electricity supply licence referred to in paragraph 6.

| |      |                                       
| | ---- | --------------------------------------
| | LAdt | is derived from the following formula:








| | 
| | 

|1 These terms will only be included if the proposed modification in respect of the incentive scheme has been made or is made on the same day.
|---------------------------------------------------------------------------------------------------------------------------------------------



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| |  | 
| |  | 
| |  | 

| |     |                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | PFt | means, in respect of each relevant year, the amount given in the table appearing under that term in the part of Annex C to this Condition that applies to the licensee.

| |      |                                       
| | ---- | --------------------------------------
| | PIFt | is derived from the following formula:

| |  | 
| |  | 
| |  | 

| |  |                                                           
| |  | ----------------------------------------------------------
| |  | where for the ninth relevant
        year PIFt-1 equals 1.

|   |                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | The attached table entitled Annex C to special condition B (Restriction of distribution charges) shall be inserted after Annex B to special condition B (Restriction of distribution charges).

|   |                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | In paragraph 9 of special condition D (Information to be provided to the Authority in connection with the charge restriction conditions), the following new sub-paragraph (h) shall be inserted after sub-paragraph (g):

| |     |                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (h) | the value of the term LFdt together with the value of each of its component parts, as detailed in paragraph 7 of special condition B (Restriction of distribution charges)



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|                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------
|MODIFICATION TO THE ELECTRICITY DISTRIBUTION LICENCE ISSUED TO LICENCE HOLDERS HAVING A DISTRIBUTION SERVICES AREA SITUATED IN ENGLAND AND WALES.

|        
|--------
|SCHEDULE

|   |                                                                                                  
|-- | -------------------------------------------------------------------------------------------------
|1. | Delete paragraph 6 of Special Condition B (Restriction of Distribution Charges) and replace with:

| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | For the purpose of paragraph 1, Kdt shall mean the correction factor per unit (whether of a positive or negative value) derived, subject to paragraph 3 of Special Condition C (Restriction of distribution charges: adjustments), from the following formula: provided that the value of Kdt for the eleventh relevant year shall be the value of Kdt arising for that year from the application of the formula applicable under Licence Condition 3A of the Public Electricity Supply licence of the predecessor company in the form of that condition in force on 31 March 2000, but adjusted by adding the amount of TAdt for the tenth relevant year, calculated by the application of the formula applicable under Licence Condition 3A of that Public Electricity Supply licence as then in force:

| |  |        | 
| |  | ------ | 
| |  |        | 
| |  |        | 
| |  | where: | 

| |  |       |                                                             
| |  | ----- | ------------------------------------------------------------
| |  | Rdt-1 | means the distribution revenue
        in relevant year t-1.

| |  |      |                                                                       
| |  | ---- | ----------------------------------------------------------------------
| |  | Dt-1 | means the regulated quantity
        distributed in relevant year t-1.

| |  |       |                                                                                
| |  | ----- | -------------------------------------------------------------------------------
| |  | Mdt-1 | means maximum average charge
        per unit distributed in relevant year t-1.

| |  |     |                                                                                                                                                                                                                                                                                                                                 
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Idt | means that interest rate
        in relevant year t which is equal to, where Kdt (taking no
        account of Idt for this purpose) has a positive value, the
        average specified rate plus 4, or where Kdt (taking no account
        of Idt for this purpose) has a negative value, the average
        specified rate.

| |  |        |                                                                                                                                             
| |  | ------ | --------------------------------------------------------------------------------------------------------------------------------------------
| |  | RAdt-1 | in the eleventh relevant
        year has the value of 0 and in each subsequent relevant year is derived
        from the following formula:

| |  |  | 
| |  |  | 
| |  |  | 

| |  |       
| |  | ------
| |  | where:



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| |  |      |                                                                                                                                                    
| |  | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |  | DAdt | means an amount given in
        the table appearing under that term in the part of Annex D to this Condition
        that applies to the licensee.

| |  |      |                                                                                                                                                     
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | PBdt | means the amount given in
        the table appearing under that term in the part of Annex D to this Condition
        that applies to the licensee.

|   |                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | The attached table entitled Annex D to Special Condition B (Restriction of distribution charges) shall be inserted after Annex C to Special Condition B (Restriction of distribution charges).



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|                                                                            
|----------------------------------------------------------------------------
|ANNEX A to Special
        Condition B (Restriction of distribution charges)

|                           
|---------------------------
|EASTERN ELECTRICITY LIMITED

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 287.9 | 

Cdt
  for relevant year beginning on

|             |  |  | 000s | 
|------------ |  |  | ----- | 
|             |  |  |       | 
|1 April 2000 |  |  | 3249  | 
|1 April 2001 |  |  | 3281  | 
|1 April 2002 |  |  | 3314  | 
|1 April 2003 |  |  | 3347  | 
|1 April 2004 |  |  | 3381  | 

every subsequent relevant year 3415

P0i

|Column 1
      unit category i |  |  | Column 2
      value (p) | 
|------------------------------ |  |  | ------------------------ | 
|                               |  |  |                         
|LV1                            |  |  | 2.0009                   | 
|LV2                            |  |  | 0.3031                   | 
|LV3                            |  |  | 1.3431                   | 
|HV                             |  |  | 0.4584                   | 



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|                                          
|------------------------------------------
|EAST MIDLANDS ELECTRICITY DISTRIBUTION PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 240.3 | 

Cdt for relevant year beginning on

|                     |  |  | 000s | 
|-------------------- |  |  | ----- | 
|                     |  |  |       | 
|1
        April 2000 |  |  | 2376  | 
|1
        April 2001 |  |  | 2400  | 
|1
        April 2002 |  |  | 2424  | 
|1
        April 2003 |  |  | 2448  | 
|1
        April 2004 |  |  | 2472  | 

every subsequent relevant year 2497

P0i

|Column 1
      unit category i |  |  | Column 2
      value (p) | 
|------------------------------ |  |  | ------------------------ | 
|                               |  |  |                         
|LV1                            |  |  | 1.6131                   | 
|LV2                            |  |  | 0.5557                   | 
|LV3                            |  |  | 1.5711                   | 
|HV                             |  |  | 0.6350                   | 



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|                         
|-------------------------
|LONDON POWER NETWORKS PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 220.8 | 

Cdt for relevant year beginning on

|             |  |  | 000s | 
|------------ |  |  | ----- | 
|             |  |  |       | 
|1 April 2000 |  |  | 2072  | 
|1 April 2001 |  |  | 2093  | 
|1 April 2002 |  |  | 2114  | 
|1 April 2003 |  |  | 2135  | 
|1 April 2004 |  |  | 2156  | 

every subsequent relevant year 2178

P0i

|Column 1        |           |  | Column 2 | 
|--------------- | --------- |  | -------- | 
|unit category i | value (p)
|                |           |  |         
|LV1             |           |  | 2.2073   | 
|LV2             |           |  | 0.4057   | 
|LV3             |           |  | 1.5912   | 
|HV              |           |  | 0.5932   | 



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|          
|----------
|MANWEB PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 158.0 | 

Cdt for relevant year beginning on

|             |  |  | 000s | 
|------------ |  |  | ----- | 
|             |  |  |       | 
|1 April 2000 |  |  | 1423  | 
|1 April 2001 |  |  | 1437  | 
|1 April 2002 |  |  | 1452  | 
|1 April 2003 |  |  | 1466  | 
|1 April 2004 |  |  | 1481  | 

every subsequent relevant year 1496

P0i

|Column
        1 |           |  | Column 2 | 
|---------------- | --------- |  | -------- | 
|unit category i  | value (p)
|                 |           |  |         
|LV1              |           |  | 2.1041   | 
|LV2              |           |  | 0.4323   | 
|LV3              |           |  | 1.7558   | 
|HV               |           |  | 0.5097   | 



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|                           
|---------------------------
|GPU POWER NETWORKS (UK) PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 243.5 | 

Cdt for relevant year beginning on

|             |  |  | 000s | 
|------------ |  |  | ----- | 
|             |  |  |       | 
|1 April 2000 |  |  | 2303  | 
|1 April 2001 |  |  | 2326  | 
|1 April 2002 |  |  | 2349  | 
|1 April 2003 |  |  | 2373  | 
|1 April 2004 |  |  | 2397  | 
|             |  |  |       | 

every subsequent relevant year 2420

P0i

|Column
        1        |  |  | Column 2  | 
|----------------------- |  |  | --------- | 
|unit
        category i |  |  | value (p) | 
|                        |  |  |          
|LV1                     |  |  | 1.9729    | 
|LV2                     |  |  | 0.3966    | 
|LV3                     |  |  | 1.6108    | 
|HV                      |  |  | 0.5992    | 



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|                                      
|--------------------------------------
|NORTHERN ELECTRIC DISTRIBUTION LIMITED

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 152.6 | 

Cdt for relevant year beginning on

|                     |  |  | 000s | 
|-------------------- |  |  | ----- | 
|                     |  |  |       | 
|1
        April 2000 |  |  | 1500  | 
|1
        April 2001 |  |  | 1515  | 
|1
        April 2002 |  |  | 1530  | 
|1
        April 2003 |  |  | 1545  | 
|1
        April 2004 |  |  | 1561  | 
|                     |  |  |       | 
|                     |  |  |       | 

every subsequent relevant year 1577

P0i

|Column
        1        |           |  | Column 2 | 
|----------------------- | --------- |  | -------- | 
|unit
        category i | value (p)
|                        |           |  |         
|LV1                     |           |  | 2.0911   | 
|LV2                     |           |  | 0.3273   | 
|LV3                     |           |  | 1.9284   | 
|HV                      |           |  | 0.4723   | 



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|          
|----------
|NORWEB plc

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 208.9 | 

Cdt for relevant year beginning on

|             |  |  | 000s | 
|------------ |  |  | ----- | 
|             |  |  |       | 
|1 April 2000 |  |  | 2250  | 
|1 April 2001 |  |  | 2272  | 
|1 April 2002 |  |  | 2295  | 
|1 April 2003 |  |  | 2318  | 
|1 April 2004 |  |  | 2341  | 
|             |  |  |       | 

every subsequent relevant year 2365

P0i

|Column
        1        |  |  | Column 2  | 
|----------------------- |  |  | --------- | 
|unit
        category i |  |  | value (p) | 
|                        |  |  |          
|LV1                     |  |  | 2.1750    | 
|LV2                     |  |  | 0.2821    | 
|LV3                     |  |  | 1.6304    | 
|HV                      |  |  | 0.5335    | 



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|                           
|---------------------------
|SEEBOARD POWER NETWORKS PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 159.1 | 

Cdt for relevant year beginning on

|                               |  |  | 000s | 
|------------------------------ |  |  | ----- | 
|                               |  |  |       | 
|1 April 2000                   |  |  | 2153  | 
|1 April 2001                   |  |  | 2175  | 
|1 April 2002                   |  |  | 2196  | 
|1 April 2003                   |  |  | 2218  | 
|1 April 2004                   |  |  | 2240  | 
|every subsequent relevant year |  |  | 2263  | 

|    | 
|--- | 
|P0i

|                |  |  |           | 
|--------------- |  |  | --------- | 
|Column 1        |  |  | Column 2  | 
|unit category i |  |  | value (p) | 
|                |  |  |          
|LV1             |  |  | 1.8735    | 
|LV2             |  |  | 0.3213    | 
|LV3             |  |  | 1.4098    | 
|HV              |  |  | 0.5892    | 



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|                                        
|----------------------------------------
|SOUTHERN ELECTRIC POWER DISTRIBUTION PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 297.7 | 

Cdt for relevant year beginning on

|                               |  |  | 000s | 
|------------------------------ |  |  | ----- | 
|                               |  |  |       | 
|1 April 2000                   |  |  | 2728  | 
|1 April 2001                   |  |  | 2755  | 
|1 April 2002                   |  |  | 2783  | 
|1 April 2003                   |  |  | 2811  | 
|1 April 2004                   |  |  | 2839  | 
|every subsequent relevant year |  |  | 2867  | 

|    | 
|--- | 
|P0i

|                        |  |  |           | 
|----------------------- |  |  | --------- | 
|Column
        1        |  |  | Column 2  | 
|unit
        category i |  |  | value (p) | 
|                        |  |  |          
|LV1                     |  |  | 2.0600    | 
|LV2                     |  |  | 0.3816    | 
|LV3                     |  |  | 1.4815    | 
|HV                      |  |  | 0.5560    | 



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|                                            
|--------------------------------------------
|WESTERN POWER DISTRIBUTION (SOUTH WALES) PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 125.6 | 

Cdt for relevant year beginning on

|                               |  |  | 000s | 
|------------------------------ |  |  | ----- | 
|                               |  |  |       | 
|1 April 2000                   |  |  | 998   | 
|1 April 2001                   |  |  | 1008  | 
|1 April 2002                   |  |  | 1018  | 
|1 April 2003                   |  |  | 1028  | 
|1 April 2004                   |  |  | 1039  | 
|every subsequent relevant year |  |  | 1049  | 

|    | 
|--- | 
|P0i

|                        |  |  |           | 
|----------------------- |  |  | --------- | 
|Column
        1        |  |  | Column 2  | 
|unit
        category i |  |  | value (p) | 
|                        |  |  |          
|LV1                     |  |  | 2.4442    | 
|LV2                     |  |  | 0.3641    | 
|LV3                     |  |  | 2.2009    | 
|HV                      |  |  | 0.7272    | 



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|                                           
|-------------------------------------------
|WESTERN POWER DISTRIBUTION (SOUTH WEST) PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 171.0 | 

Cdt for relevant year beginning on

|                               |  |  | 000s | 
|------------------------------ |  |  | ----- | 
|                               |  |  |       | 
|1 April 2000                   |  |  | 1369  | 
|1 April 2001                   |  |  | 1383  | 
|1 April 2002                   |  |  | 1397  | 
|1 April 2003                   |  |  | 1410  | 
|1 April 2004                   |  |  | 1425  | 
|every subsequent relevant year |  |  | 1439  | 

|    | 
|--- | 
|P0i

|                        |  |  |           | 
|----------------------- |  |  | --------- | 
|Column
        1        |  |  | Column 2  | 
|unit
        category i |  |  | value (p) | 
|                        |  |  |          
|LV1                     |  |  | 2.3889    | 
|LV2                     |  |  | 0.6679    | 
|LV3                     |  |  | 1.8707    | 
|HV                      |  |  | 0.5072    | 



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|                                      
|--------------------------------------
|YORKSHIRE ELECTRICITY DISTRIBUTION PLC

|    |  |  | £m    | 
|--- |  |  | ----- | 
|    |  |  |       | 
|PUM |  |  | 215.4 | 

Cdt for relevant year beginning on

|                               |  |  | 000s | 
|------------------------------ |  |  | ----- | 
|                               |  |  |       | 
|1 April 2000                   |  |  | 2129  | 
|1 April 2001                   |  |  | 2150  | 
|1 April 2002                   |  |  | 2172  | 
|1 April 2003                   |  |  | 2194  | 
|1 April 2004                   |  |  | 2215  | 
|every subsequent relevant year |  |  | 2238  | 

|    | 
|--- | 
|P0i

|                        |  |  |           | 
|----------------------- |  |  | --------- | 
|Column
        1        |  |  | Column 2  | 
|unit
        category i |  |  | value (p) | 
|                        |  |  |          
|LV1                     |  |  | 1.9497    | 
|LV2                     |  |  | 0.3271    | 
|LV3                     |  |  | 1.6654    | 
|HV                      |  |  | 0.5750    | 



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|                                                                    
|--------------------------------------------------------------------
|ANNEX B to Special Condition B (Restriction of distribution charges)

|                                                           |  |  | PR £M | 
|---------------------------------------------------------- |  |  | ----- | 
|                                                           |  |  |      
|EASTERN
        ELECTRICITY LIMITED                        |  |  | 2.97  | 
|EAST
        MIDLANDS ELECTRICITY DISTRIBUTION PLC         |  |  | 2.35  | 
|GPU
        POWER NETWORKS (UK) PLC                        |  |  | 2.34  | 
|LONDON
        POWER NETWORKS PLC                          |  |  | 2.14  | 
|MANWEB
        PLC                                         |  |  | 1.69  | 
|NORTHERN
        ELECTRICITY DISTRIBUTION PLC              |  |  | 1.76  | 
|NORWEB
        PLC                                         |  |  | 2.28  | 
|SCOTTISH
        HYDRO-ELECTRIC POWER DISTRIBUTION LIMITED |  |  | 1.16  | 
|SP
        DISTRIBUTION LIMITED                            |  |  | 2.01  | 
|SEEBOARD
        POWER NETWORKS PLC                        |  |  | 2.15  | 
|SOUTHERN
        ELECTRIC POWER DISTRIBUTION PLC           |  |  | 2.64  | 
|WESTERN
        POWER DISTRIBUTION (SOUTH WALES) PLC       |  |  | 1.38  | 
|WESTERN
        POWER DISTRIBUTION (SOUTH WEST) PLC        |  |  | 1.65  | 
|YORKSHIRE
        ELECTRICITY DISTRIBUTION PLC             |  |  | 2.19  | 



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|                                                                    
|--------------------------------------------------------------------
|ANNEX C TO SPECIAL CONDITION B (RESTRICTION OF DISTRIBUTION CHARGES)

|                                                                      | 
|--------------------------------------------------------------------- | 
|EPN DISTRIBUTION LIMITED
      (FORMERLY EASTERN ELECTRICITY LIMITED)

|    | 
|--- | 
|PFt | 

|2000/01 | £0.731 millions
|------- | ---------------

|2001/02 | £0.731 millions
|------- | ---------------

|subsequent relevant years | £0.731 millions
|------------------------- | ---------------

|                                                 | 
|------------------------------------------------ | 
|EAST MIDLANDS ELECTRICITY
      DISTRIBUTION PLC | 

|    | 
|--- | 
|PFt | 

|2000/01 | £0.532 millions
|------- | ---------------

|2001/02 | £0.517 millions
|------- | ---------------

|subsequent relevant years | £0.517 millions
|------------------------- | ---------------

|                                | 
|------------------------------- | 
|LONDON POWER NETWORKS
      PLC | 

|    | 
|--- | 
|PFt | 

|2000/01 | £0.461 millions
|------- | ---------------

|2001/02 | £0.451 millions
|------- | ---------------

|subsequent relevant years | £0.451 millions
|------------------------- | ---------------

|              | 
|------------- | 
|SP MANWEB PLC | 

| | 
| | 

|PFt     |                
|------- | ---------------
|2000/01 | £0.423 millions

|2001/02 | £0.414 millions
|------- | ---------------

|subsequent relevant years | £0.414 millions
|------------------------- | ---------------

|                                  | 
|--------------------------------- | 
|GPU POWER NETWORKS
      (UK) PLC | 

|    | 
|--- | 
|PFt | 

|2000/01                   | £0.511 millions
|------------------------- | ---------------
|2001/02                   | £0.492 millions
|subsequent relevant years | £0.492 millions



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|                                             | 
|-------------------------------------------- | 
|NORTHERN ELECTRIC
      DISTRIBUTION LIMITED | 

|    | 
|--- | 
|PFt | 

|2000/01 | £0.317 millions
|------- | ---------------

|2001/02 | £0.306 millions
|------- | ---------------

|subsequent relevant years | £0.306 millions
|------------------------- | ---------------

|                                                             | 
|------------------------------------------------------------ | 
|UNITED UTILITIES ELECTRICITY
      PLC (FORMERLY NORWEB PLC) | 

|    | 
|--- | 
|PFt | 

|2000/01 | £0.458 millions
|------- | ---------------

|2001/02 | £0.438 millions
|------- | ---------------

|subsequent relevant years | £0.438 millions
|------------------------- | ---------------

|                                  | 
|--------------------------------- | 
|SEEBOARD POWER NETWORKS
      PLC | 

|    | 
|--- | 
|PFt | 

|        |                
|------- | ---------------
|2000/01 | £0.423 millions

|2001/02 | £0.417 millions
|------- | ---------------

|subsequent relevant years | £0.417 millions
|------------------------- | ---------------

|                                               | 
|---------------------------------------------- | 
|SOUTHERN ELECTRIC
      POWER DISTRIBUTION PLC | 

|    | 
|--- | 
|PFt | 

|        |                
|------- | ---------------
|2000/01 | £0.649 millions

|2001/02 | £0.649 millions
|------- | ---------------

|subsequent relevant years | £0.649 millions
|------------------------- | ---------------

|                                                   | 
|-------------------------------------------------- | 
|WESTERN POWER DISTRIBUTION
      (SOUTH WALES) PLC | 

|    | 
|--- | 
|PFt | 

|        |                
|------- | ---------------
|2000/01 | £0.252 millions

|2001/02 | £0.247 millions
|------- | ---------------

|subsequent relevant years | £0.247 millions
|------------------------- | ---------------



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|                                                  | 
|------------------------------------------------- | 
|WESTERN POWER DISTRIBUTION
      (SOUTH WEST) PLC | 

|    | 
|--- | 
|PFt | 

|        |                
|------- | ---------------
|2000/01 | £0.288 millions

|2001/02 | £0.279 millions
|------- | ---------------

|subsequent relevant years | £0.279 millions
|------------------------- | ---------------

|                                             | 
|-------------------------------------------- | 
|YORKSHIRE ELECTRICITY
      DISTRIBUTION PLC | 

|    | 
|--- | 
|PFt | 

|        |                
|------- | ---------------
|2000/01 | £0.474 millions

|2001/02 | £0.458 millions
|------- | ---------------

|subsequent relevant years | £0.458 millions
|------------------------- | ---------------



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|                                                                    
|--------------------------------------------------------------------
|ANNEX D TO SPECIAL CONDITION B (RESTRICTION OF DISTRIBUTION CHARGES)

|                                                                      | 
|--------------------------------------------------------------------- | 
|EPN DISTRIBUTION LIMITED
      (FORMERLY EASTERN ELECTRICITY LIMITED) | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.474 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                                 | 
|------------------------------------------------ | 
|EAST MIDLANDS ELECTRICITY
      DISTRIBUTION PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.987 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                    | 
|----------------------------------- | 
|LONDON POWER NETWORKS
      LIMITED | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.9
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £0.123 million
|------- | --------------

|Thereafter | 0
|---------- | -



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|              | 
|------------- | 
|SP MANWEB PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.688 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                  | 
|--------------------------------- | 
|GPU POWER NETWORKS
      (UK) PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £2.705 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                             | 
|-------------------------------------------- | 
|NORTHERN ELECTRIC
      DISTRIBUTION LIMITED | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £0.998 million
|------- | --------------

|Thereafter | 0
|---------- | -



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|                                                             | 
|------------------------------------------------------------ | 
|UNITED UTILITIES ELECTRICITY
      PLC (FORMERLY NORWEB PLC) | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---
|           |    

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.760 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                  | 
|--------------------------------- | 
|SEEBOARD POWER NETWORKS
      PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.283 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                               | 
|---------------------------------------------- | 
|SOUTHERN ELECTRIC
      POWER DISTRIBUTION PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.9
|------- | ---

|Thereafter | 0.0
|---------- | ---

|PBdt | 
|---- | 

|        |               
|------- | --------------
|2000/01 | £0.778 million

|Thereafter | 0
|---------- | -



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|                                                   | 
|-------------------------------------------------- | 
|WESTERN POWER DISTRIBUTION
      (SOUTH WALES) PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.089 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                                  | 
|------------------------------------------------- | 
|WESTERN POWER DISTRIBUTION
      (SOUTH WEST) PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.474 million
|------- | --------------

|Thereafter | 0
|---------- | -

|                                             | 
|-------------------------------------------- | 
|YORKSHIRE ELECTRICITY
      DISTRIBUTION PLC | 

|     | 
|---- | 
|DAdt | 

|2000/01 | 0.8
|------- | ---

|Thereafter | 0.0
|---------- | ---

|     | 
|---- | 
|PBdt | 

|2000/01 | £1.687 million
|------- | --------------

|Thereafter | 0
|---------- | -



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Special Condition C: Restriction
  of distribution charges: adjustments

|1. | If, in respect of any relevant year, the average charge per unit distributed exceeds the maximum average charge per unit distributed by more than 3 per cent, the licensee shall furnish an explanation to the Authority and in the next following relevant year the licensee shall not effect any increase in charges unless it has demonstrated to the reasonable satisfaction of the Authority that the average charge per unit distributed would not be likely to exceed the maximum charge per unit distributed in that next following relevant year.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | If, in respect of any two successive relevant years, the sum of the amounts by which the average charge per unit distributed has exceeded the maximum average charge per unit distributed is more than 4 per cent,then in the next following relevant year the licensee shall, if required by the Authority, adjust its charges such that the average charge per unit distributed would not be likely, in the judgement of the Authority, to exceed the maximum average charge per unit in that next following relevant year.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | If, in respect of two successive relevant years, the average charge per unit distributed is less than 90 per cent of the maximum average charge per unitdistributed, the Authority, after consultation with the licensee, may direct that in calculating Kdt for the purposes of paragraph 6 of Special Condition B (Restriction of distribution charges) in respect of the next following relevant year, there shall be substituted for Rdt-1 in the formula at paragraph 6 of Special Condition B (Restriction of distribution charges) such figure as the Authority may specify being not less than Rdt-1 and not more than 0.90 (Dt-1.Mdt-1).



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Special Condition D: Information
  to be provided to the Authority in connection with the charge restriction conditions

|1. | Where the licensee is intending to make any change in charges for the provision of distribution services regulated under Special Condition B (Restriction of distribution charges) the licensee shall (unless otherwise agreed by the Authority) not later than the date of publication of such charges provide the Authority with:
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                                                                                                                                                                                                          
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | written forecast of the maximum average charge per unit distributed, together with its components, in respect of the relevant year t in which such a change is to take effect and in respect of the next following relevant year t+1; and

| |     |                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | a written estimate of the maximum average charge per unit distributed, together with its components, in respect of the relevant year t-1 immediately preceding the relevant year in which the change is to take effect unless a statement complying with paragraph 7 in respect of relevant year t-1 has been furnished to the Authority before the publication of the proposed change.

|   |                 
|-- | ----------------
|2. | [No longer used]

|   |                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | If within three months of the commencement of any relevant year t the licensee has not made any such change in charges as is referred to in paragraph 1, the licensee shall provide the Authority with a written forecast of the maximum average charge per unit distributed, together with its components, in respect of the relevant year t.

|   |                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | The Authority may issue directions providing that any forecast or estimate provided in accordance with paragraphs 1 or 3 shall be accompanied by such information as regards the assumptions underlying the forecast or estimate as may be necessary to enable the Authority to be satisfied that the forecast or estimate has been properly prepared on a consistent basis.

|   |                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------
|5. | Not later than six weeks after the commencement of each relevant year t, the licensee shall send to the Authority a statement as to:

| |     |                                                                                                                                                                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | whether or not the provisions of Special Condition C (Restriction of distribution charges: adjustments) are likely to be applicable in consequence of the average charge per unit distributed in the preceding relevant year t-1 or the two preceding relevant years t-1 and t-2; and

| |     |                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | its best estimate as to the relevant correction factor Kdt to be applied in calculating the maximum average charge per unit distributed in respect of the relevant year t.

|   |                 
|-- | ----------------
|6. | [No longer used]



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|   |                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|7. | Not later than three months after the end of a relevant year the licensee shall send to the Authority a statement, in respect of that relevant year, showing the specified items referred to in paragraph 9.

|   |                                                               
|-- | --------------------------------------------------------------
|8. | The statement referred to in the preceding paragraph shall be:

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | accompanied by a report from the Auditors that in their opinion (i) such statement fairly presents each of the specified items referred to in paragraph 9 in accordance with the requirements of the charge restriction conditions and (ii) the amounts shown in respect of each of those specified items are in accordance with the licensees accounting records which have been maintained in respect of the distribution business in accordance with standard condition 42 (Regulatory Accounts) of this licence; and

| |     |                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | certified by a director of the licensee on behalf of the licensee that to the best of his knowledge, information and belief having made all reasonable enquiries:

| |  |     |                                                                                                                                                            
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (i) | there is no amount included in its calculations under Special Condition B (Restriction of distribution charges) and Schedule A which represents other than:

| |  |  |      |                                                                                                                  
| |  |  | ---- | -----------------------------------------------------------------------------------------------------------------
| |  |  | (aa) | bona fide consideration for the provision of distribution services in the course of its distribution business; or

| |  |  |      |                                                                               
| |  |  | ---- | ------------------------------------------------------------------------------
| |  |  | (bb) | an amount permitted under the charge restriction conditions to be so included;

| |  |       |                                                                                                                                                                                                                                                                                
| |  | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii)  | there is no amount included
        in its calculations of allowed security costs under Special Condition
        E (Allowance in respect of security costs) which represents other than
        an amount permitted under the charge restriction conditions to be so included;
| |  |       |                                                                                                                                                                                                                                                                                
| |  | (iii) | no service has been treated as an excluded
      service which was not properly so treated and no amount included in the
      revenues in respect thereof represents other than bona fide consideration
      for the provision of the excluded service to which it relates;  
| |  |       |                                                                                                                                                                                                                                                                                
| |  | (iv)  | all amounts which should properly be taken
      into account for the purposes of the charge restriction conditions have
      been taken into account.                                                                                                                        

|   |                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------
|9. | The specified items to be contained in the statement referred to in paragraph 7 shall be the following:

| |     |                                    
| | --- | -----------------------------------
| | (a) | the regulated quantity distributed;

| |     |                                                                       
| | --- | ----------------------------------------------------------------------
| | (b) | the quantity distributed in each regulated distribution unit category;



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| |     |                                         
| | --- | ----------------------------------------
| | (c) | the average charge per unit distributed;

| |     |                                                                                                                                                           
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | the amount in respect of the Terms ALt and Lt, in paragraph 3 of Special Condition B (Restriction of distribution charges) calculated as therein provided;

| |     |                                                                                                                                                                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (e) | the value of the term TAdt in respect of the tenth relevant year only, together with the value of each of its component parts, as detailed in paragraph 4 of Special Condition B (Restriction of distribution charges) in the form of the licence in force on 31 March 2000;

| |     |                                                                                                            
| | --- | -----------------------------------------------------------------------------------------------------------
| | (f) | the information referred to at paragraph 8 of Special Condition E (Allowance in respect of security costs);

| |     |                                                                                               
| | --- | ----------------------------------------------------------------------------------------------
| | (g) | the statements and information referred to in paragraphs A5, B2, C7, D1 and E10 of Schedule A.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | Where the Authority issues directions in accordance with paragraph 9 of Special Condition E (Allowance in respect of security costs) or paragraphs A6, B3, C8, D5 or E11 of Schedule A then such directions shall not have effect from a date earlier than the commencement of the relevant year to which the statement last furnished to the Authority pursuant to paragraph 7 prior to the issue of the directions related, unless such statement (or the accompanying report or certificate under paragraph 8) or any statement, report or certificate in respect of an earlier relevant year was incorrect or was misleading in any material respect.

|    |                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|11. | Where the Authority issues such directions as are referred to in the preceding paragraph the Authority may require the licensee to provide a revised statement in respect of such of the specified items as may be affected by the directions, and the licensee shall comply with such request.



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Special Condition E: Allowance
  in respect of security costs

|1. | At any time during a security period, the licensee may give notice in writing to the Authority suspending, with effect from the date of receipt of the notice by the Authority, application of such of the charge restriction conditions as may be specified in the notice for the unexpired term of the security period.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | At any time during a security period, the Authority may (having regard to its duties under the Act or under the Utilities Act 2000) by means of directions:

| |     |                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------
| | (a) | suspend or modify for the unexpired term of the security period the charge restriction conditions or any part or parts thereof; or

| |     |                                                                                          
| | --- | -----------------------------------------------------------------------------------------
| | (b) | introduce for the unexpired term of the security period new charge restriction conditions

| |                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------
| | in either case, so as to make such provision as in the opinion or estimation of the Authority is requisite or appropriate:

| |     |                                                                                                                                                                
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | to enable the licensee to recover by means of increased charges an amount estimated as being equal to the licensees allowed security costs during such period;

| |      |                                                                                                                                                                                                                                                                                                                                     
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | to ensure that such part of the amount referred to in sub-paragraph (i) above as is estimated as being equal to the allowed security costs incurred by the licensee as costs in its distribution business are recovered by means of appropriate equitable increases on the charges made by the licensee in its distribution business

| |                                                                          
| | -------------------------------------------------------------------------
| | and the licensee shall comply with the terms of any directions so issued.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | At any time following a security period, the Authority may (following such consultation with the licensee and others as the Authority may consider appropriate) issue directions suspending or modifying the charge restriction conditions or any part or parts thereof or replacing such directions as may have been made during the security period and introducing such new charge restriction conditions as in the opinion of the Authority are appropriate in all the circumstances (including at the Authoritys discretion an appropriate adjustment having regard to any profit gained or foregone by the licensee during the security period), and the licensee shall comply with any directions so issued.

|   |                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | At any time within three months after the issue of directions by the Authority under paragraph 3, the licensee may serve on the Authority a disapplication request in respect of such of the charge restriction conditions or any part or parts thereof as are specified in the request.



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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | If within three months of the receipt by the Authority of the disapplication request referred to in paragraph 4, the Authority has either not agreed in writing to such disapplication request or has not made a reference to the Competition Commission under Section 12 of the Act relating to the modification of the charge restriction conditions, the licensee may deliver one months written notice to the Authority terminating the application of the charge restriction conditions (or any part or parts thereof) as were specified in the disapplication request.

|   |                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | Subject to paragraphs 7 and 9, the licensee shall in any relevant year be entitled to recover an aggregate amount equal to its allowed security costs in that year or (insofar as not previously recovered) any previous year, by means of appropriate equitable increases on the charges made by the licensee in its distribution business.

|   |                                                                      
|-- | ---------------------------------------------------------------------
|7. | Paragraph 6 shall not apply in so far as such allowed security costs:

| |     |                                             
| | --- | --------------------------------------------
| | (a) | were otherwise recovered by the licensee; or

| |     |                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------
| | (b) | were taken into account by the Authority in setting charge restriction conditions by means of directions issued under paragraph 3 above.

|   |                                                                                                                                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|8. | The licensee shall following the end of each relevant year provide to the Authority, as being one of the specified items to be contained in the statement referred to at paragraph 7 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions), details in respect of that relevant year of:

| |     |                                                         
| | --- | --------------------------------------------------------
| | (a) | the amount of the licensees allowed security costs; and

| |     |                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------
| | (b) | the aggregate amounts charged under paragraph 6 on account of the licensees allowed security costs;

| |     |                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------
| | (c) | and the bases and calculations underlying the increases in charges made by the licensee in its distribution business under paragraph 6.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|9. | Where the Authority is satisfied that the licensee has recovered amounts in excess of the allowed security costs, the Authority may issue directions requiring the licensee to take such steps as may be specified to reimburse purchasers from the distribution business for the excess amounts charged to them, and the licensee shall comply with any directions so issued provided that if the excess amounts relate to allowed security costs paid to any authorised electricity operator, the licensee shall not be obliged to make any such reimbursement unless and until it has recovered such costs from the relevant authorised electricity operator.

|    |                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10. | No amounts charged by the licensee under this Condition (whether or not subsequently required to be reimbursed) shall be taken into account for the purpose of applying the charge restriction provisions of Special Condition B (Restriction of distribution charges).



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|11 | In this Condition:      |                                                                                
|-- | ----------------------- | -------------------------------------------------------------------------------
|   |                         |                                                                                
|   | allowed security cost | shall have the meaning ascribed
        to that term in the Fuel Security Code.

| |                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | security period | means a period commencing on the date on which any direction issued by the Secretary of State under Section 34(4)(b) of the Act enters into effect and terminating on the date (being not earlier than the date such direction, as varied, is revoked or expires) as the Authority, after consultation with such persons (including without limitation, licence holders liable to be principally affected) as it shall consider appropriate, may with the consent of the Secretary of State by notice to all licence holders determine after having regard to the views of such persons.



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|                                                                       | 
|---------------------------------------------------------------------- | 
|Special
        Condition F: Duration of charge restriction conditions

|   |                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The charge restriction conditions shall apply so long as this licence continues in force but shall cease to have effect (in whole or in part, as the case may be) if the licensee delivers to the Authority a disapplication request made in accordance with paragraph 2 and:

| |     |                                                                  
| | --- | -----------------------------------------------------------------
| | (a) | the Authority agrees in writing to the disapplication request; or

| |     |                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | their application (in whole or in part) is terminated by notice given by the licensee in accordance with either paragraph 4 or paragraph 5.

|   |                                                                                                                                                                                                                                                                                                                                                                              
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | A disapplication request pursuant to this Condition F shall (a) be in writing addressed to the Authority, (b) specify the charge restriction conditions (or any part or parts thereof) to which the request relates and (c) state the date from which the licensee wishes the Authority to agree that the specified charge restriction conditions shall cease to have effect.

|   |                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | Save where the Authority otherwise agrees, no disapplication following delivery of a disapplication request pursuant to this Condition F shall have effect earlier than that date which is the later of:

| |     |                                                                                       
| | --- | --------------------------------------------------------------------------------------
| | (a) | a date being not less than 18 months after delivery of the disapplication request; and

| |     |                 
| | --- | ----------------
| | (b) | 31st March 2005.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | If the Authority has not made a reference to the Competition Commission under Section 12 of the Act relating to the modification of the charge restriction conditions before the beginning of the period of 12 months which will end with the disapplication date, the licensee may deliver written notice to the Authority terminating the application of such of the charge restriction conditions (or any part or parts thereof) as are specified in the disapplication request with effect from the disapplication date or a later date.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. | If the Competition Commission makes a report on a reference made by the Authority relating to the modification of the charge restriction conditions (or any part or parts thereof) specified in the disapplication request and such report does not include a conclusion that the cessation of such charge restriction conditions, in whole or in part, operates or may be expected to operate against the public interest, the licensee may within 30 days after the publication of the report by the Authority in accordance with Section 13 of the Act deliver to the Authority written notice terminating the application of such charge restriction conditions with effect from the disapplication date or later.



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|6. | A disapplication request
        or notice served under this Condition may be served in respect of a specified
        geographic area.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------

|                                                                                  | 
|--------------------------------------------------------------------------------- | 
|SCHEDULE
        A: SUPPLEMENTARY PROVISIONS OF THE CHARGE RESTRICTION CONDITIONS

Part A. Principles for Attribution

General Principles

|A1. | Where for the purposes of the charge restriction conditions, a share of costs borne by the licensee requires to be attributed to any part of the market, the licensee shall make that attribution on a basis which ensures that no more than a fair proportion of those costs, reflecting the costs incurred by the licensee in supplying that part of the market, are so attributed.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|A2. | The following paragraphs of this Part of Schedule A are without prejudice to paragraph A1.

Transmission connection point charges
  and remote transmission asset rentals

|A3. | The transmission connection point charges and remote transmission asset rentals requiring to be attributed between the regulated quantity distributed and other quantities distributed shall be attributed in proportion to the transmission connection point and remote transmission asset capacity required for the purpose of distributing those quantities.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Distribution losses

|A4. | Where an amount (in units) in respect of distribution losses requires to be calculated and attributed in respect of EHV units and units distributed by the licensee for the purpose of supply to premises outside the licensees distribution services area, such calculation and attribution shall be made consistently with the principles underlying the schedule of adjustment factors referred to at sub-paragraph (b) of paragraph 2 of Condition 4 (Basis of Charges for Use of System and Connection to System: Requirements for Transparency).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Information to be provided by licensee

|A5. | The licensee shall following the end of each relevant year furnish to the Authority, as being one of the specified items to be included in the statement referred to at paragraph 7 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions), a statement confirming that the calculation of , the transmission connection point charges, the remote transmission asset rentals and of distribution losses was made in accordance with the provisions of this Part of Schedule A.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|A6. | Where the Authority is satisfied
        that the basis of calculation or attribution (as the case may be) used
        by the licensee is not in conformity with paragraph A1, the Authority
        may issue directions specifying an alternative basis of calculation or
        attribution, and the basis of calculation or attribution by the licensee
        (as the case may be) shall be adjusted accordingly with effect from
        the date of issue of the directions or (subject to paragraph 10 of Special
        Condition D (Information to be provided to the Authority in connection
        with the charge restriction conditions)) such other date as may be specified
        in those directions.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Part B. EHV premises

|B1. | EHV premises shall comprise:
|--- | ----------------------------

| |     |                                                                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | in relation to premises connected to the licensees distribution system as at the date this licence enters into force, those premises specified in the list of EHV premises notified in writing to the Authority by the licensee within twenty-eight days after this licence enters into force; and

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | in relation to premises connected to the licensees distribution system which are either first connected or (having been previously connected) have had their connections materially altered following the date this licence enters into force, means premises connected to the licensees distribution system as a voltage at or higher than 22 kilovolts or at a sub-station with a primary voltage of 66 kilovolts or above.

|    |                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|B2. | The licensee shall following the end of each relevant year furnish to the Authority, as being one of the specified items to be included in the statement referred to at paragraph 7 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions), a statement listing any changes in the premises falling to be treated as EHV premises.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|B3. | Where the Authority is satisfied that any premises treated by the licensee as EHV premises should not in conformity with sub-paragraph B1(b) above be so treated, the Authority may issue directions to that effect, and such premises shall cease to be treated as EHV premises from the date of issue of the directions or (subject to paragraph 10 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions)) such other date as may be specified in those directions.



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|Part C. Excluded services
|-------------------------

|    |                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|C1. | There may be treated as excluded services provided by the licensee in its distribution business such services in respect of which charges are made which:

| |     |                                                  
| | --- | -------------------------------------------------
| | (a) | do not fall within paragraph C2 of this Part; and

| |     |                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | may (subject to paragraph C8) be determined by the licensee as falling under one of the principles set out in paragraphs C3 to C6 of this Part.

|    |                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C2. | No service provided by the licensee as part of its distribution business shall be treated as an excluded service in so far as it consists of the provision of services remunerated under the use of system charges in accordance with paragraph 2 of Standard Condition 4 including (without prejudice to the foregoing):

| |  |     |                                                                             
| |  | --- | ----------------------------------------------------------------------------
| |  | (i) | (subject to paragraph C3
        of this Part) the transport of electricity;

| |  |      |                                                                                                                                                                
| |  | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii) | the carrying out of works
        for the installation of electric lines or electrical plant (not otherwise
        payable in the form of connection charges);

| |  |       |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (iii) | the carrying out of works
        or the provision of maintenance or repair or other services for the purpose
        of enabling the licensee to comply with standard conditions 5, 9, 9A and
        15, the Electricity Supply Regulations 1988 or any regulations made under
        Section 29 of the Act or any other enactment relating to safety or standards
        applicable in respect of the distribution business; and

| |  |      |                                                                                                                                                                                               
| |  | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (iv) | (subject to paragraph C5
        of this Part) the provision, installation and maintenance of any meters,
        switchgear or other electrical plant (not being part of connection charges).

|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|C3. | The licensee may treat as being an excluded service for the purposes of its distribution business the transport of:

| |     |                                                                               
| | --- | ------------------------------------------------------------------------------
| | (a) | units of electricity not consumed in the licensees distribution services area

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | EHV units, provided that the licensees charges for the distribution of such units do not exceed the charging rates underlying the information as to EHV revenue and EHV units distributed given by the licensee to the Authority and used by it for the purposes of setting the term PUM in Special Condition B (Restriction of distribution charges), subject only to such adjustments as may be appropriate in the reasonable opinion of the Authority to reflect material variations between the actual charges made and the charging rates underlying the information as to EHV revenue provided to the Authority by the licensee.



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|    |                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C4. | Charges of the type described in paragraph 3 of standard condition 4 and charges in respect of the statements referred to in paragraph 4 of standard condition 4, may each be treated as excluded services for the purposes of the distribution business.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C5. | A service provided by the licensee as part of its distribution business may be treated as an excluded service in so far as it consists in the provision of services (including metering, electric lines or electrical plant) for the specific benefit of any third party requesting the same and not made available by the licensee as a normal part of its distribution business remunerated by use of system charges including (without prejudice to the foregoing):

| |     |                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | special metering (including time of day metering) to facilitate energy saving programmes for the benefit of customers requesting the same;

| |      |                                                                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | charges for moving mains, services or meters forming part of the licensees distribution system to accommodate extension, re-design or re-development of any premises on which the same are located or to which they are connected;

| |       |                                                                                                                                                                                                                                                                                                                           
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iii) | the provision of electric lines and electrical plant (a) insofar as the same are required for the specific purpose of enabling the provision of top-up or standby supplies or sales of electricity or (b) to provide a higher degree of security than is required for the purposes of complying with standard condition 5;

| |      |                                                                                                                                                                                                                                                                                                                                                
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iv) | the amount by which charges for the provision of prepayment meters to customers exceed charges for the provision of standard meters for such customers, in respect of which the amount receivable per customer shall not exceed that used by the Authority in formulating PUM in Special Condition B (Restriction of distribution charges); and

| |     |                                                                                                                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (v) | special metering or telemetry or data processing equipment for the purposes of enabling any person which is a party to the BSC to comply with its obligations in respect of metering thereunder, or for the performance by the licensee of any service in relation thereto.

|    |                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C6. | There may be treated as an excluded service for the purposes of the distribution business, charges for the relocation of electric lines or electrical plant and the carrying out of works associated therewith pursuant to a statutory obligation (other than under Section 9(1) or Section 16 of the Act) imposed on the licensee.

Information to be provided to the
  Authority

|C7. | The licensee shall following the end of each relevant year furnish to the Authority, as being one of the specified items to be included in the statement referred to at paragraph
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 7 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions), details specifying separately the nature of all services provided as part of its distribution business and treated as excluded services by the licensee during the course of such year and stating the revenues derived by the licensee in respect of each such service so treated.

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C8. | Where the Authority is satisfied that in light of the principles set out in paragraphs C2 to C6 inclusive any service treated by the licensee as an excluded service should not be so treated, the Authority shall issue directions to that effect, and the service or services specified in the directions shall cease to be treated as excluded services from the date of issue of the directions or (subject to paragraph 10 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions)) such other date as may be specified in the directions.



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|                                                      
|------------------------------------------------------
|Part D. Regulated distribution
        unit categories

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|D1. | The licensee shall following the end of each relevant year furnish to the Authority, as being one of the specified items to be included in the statement referred to at paragraph 7 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions), details specifying separately those use of system charges in respect of which the licensee has during the course of such year treated the units distributed as falling within the definition of each of LV1 units and LV2 units and LV3 units respectively.

|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|D2. | The definition of LV1 units includes units distributed under the following tariffs:

| |  |                                                                                                                                                                                                                                                                                   
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Domestic Economy 7 Tariff,
        day units
        Combined Premises E7 Tariff (day units)
        Non-domestic E7 Tariff (day units)
        E7 Evening and Weekend Tariff (weekday day units)
        E7 Evening and Weekend Tariff (Non-domestic) (evening and weekend units)

|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|D3. | The definition of LV2 units includes units distributed under the following tariffs:

| |  |                                                                                                                                                                                                                                                                                  
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Domestic Economy 7 Tariff
        (night units)
        Combined Premises E7 Tariff (night units)
        Non-domestic E7 Tariff (night units)
        E7 Evening and Weekend Tariff (Non-domestic) (night units)
        Restricted Hour Tariffs
        Farm Crop Drying Tariff

|    |                                                                                    
|--- | -----------------------------------------------------------------------------------
|D4. | The definition of LV3 units includes units distributed under the following tariffs:

| |  |                                                                                                                                                                                                                                                                                                                                                   |  |  | 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | 
| |  | Domestic Tariff (unrestricted)
     Combined Premises Tariff
        (unrestricted)
        Non-domestic Tariff (unrestricted)
        Monthly MD Tariff (LV)
        Monthly MD Tariff (Sub-station, LV metered)
        Monthly STOD Tariff (LV)
        Monthly STOD Tariff (Sub-station, LV metered)
        Public Lighting Tariff (monthly)

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|D5. | Notwithstanding the provisions of paragraphs D2 to D4 above, where the Authority is satisfied that a tariff or tariffs in respect of which the licensee has treated the units distributed as falling within one of the categories in paragraphs D2 to D4 above should not be so treated, the Authority shall issue directions to that effect and the tariff or tariffs specified in the directions shall cease to be so treated from the date of issue of the directions or (subject to paragraph 10 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions)) such other date as may be specified in the directions and shall with effect from such date be treated in such manner as may be specified in the directions.



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|Part E. Calculation of
      factor in respect of distribution losses
|---------------------------------------------------------------------

|    |                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E1. | The terms ALtand Lt, which are used in paragraph 3 of Special Condition B (Restriction of distribution charges), shall each be determined, for relevant years commencing on or after the 1st April 1995, using the consistent methodological basis set out in paragraphs E2 to E5 below.

|                                                                      
|----------------------------------------------------------------------
|Consistent methodological
        basis for determination of ALtand Lt

|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|E2. | Adjusted distribution losses shall be deemed to be the difference between adjusted grid supply point purchases and adjusted units distributed.

|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|E3. | Units metered on entry to the licensees distribution system shall be adjusted to obtain adjusted grid supply point purchases by:

| |     |                                                             
| | --- | ------------------------------------------------------------
| | (a) | excluding that number of units which is equal to the sum of:

| |  |     |               
| |  | --- | --------------
| |  | (i) | EHV units; and

| |  |      |                                                                                                                               
| |  | ---- | ------------------------------------------------------------------------------------------------------------------------------
| |  | (ii) | units distributed by the licensee for the purpose of supply to premises outside the licensees distribution services area; and

| |  |       |                                                                                                                                                                                                                                     
| |  | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (iii) | an amount in respect of distribution losses between the grid supply point and the exit point attributable to the units referred to in (i) and (ii) above, as determined in accordance with paragraph A4 in Part A of Schedule A; and

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | including an amount (in units) to represent the effect of units entering the licensees distribution system otherwise than at grid supply points, being the difference between the number of units so entering and the number of units that would have been required to have entered at grid supply points in their absence (such latter number of units being calculated consistently with the principles underlying the schedule of adjustment factors in respect of distribution losses referred to at sub-paragraph (b) of paragraph 2 of standard condition 4).

|    |                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E4. | For so long as units are metered on entry to the licensees distribution system at bulk supply points instead of at grid supply points, such units shall be calculated by:

| |     |                                                                                                                                                     
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | applying the procedures in paragraph E3 as if all references to units metered at grid supply points were to units metered at bulk supply points; and

| |      |                                                                                                                      
| | ---- | ---------------------------------------------------------------------------------------------------------------------
| | (ii) | grossing-up units metered at the bulk supply points by the relevant grid supply point conversion factor being either:

| |  |     |                                                                
| |  | --- | ---------------------------------------------------------------
| |  | (a) | 0.5 per cent of the units metered at the bulk supply points; or



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| |  |     |                                                                                                                                                                                                          
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (b) | such other factor to take account of losses occurring between the grid supply points and the bulk supply points as the licensee may with the prior approval of the Authority determine to be appropriate.

|    |                                                 
|--- | ------------------------------------------------
|E5. | Adjusted units distributed shall be obtained by:

| |     |                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------
| | (a) | calculating all units distributed by the licensee metered at exit points on leaving the licensees distribution system; and

| |     |                                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | deducting therefrom EHV units and units distributed for the purpose of supply to premises outside the licensees distribution services area; and

| |     |                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (c) | adding thereto an amount equal to the units consumed on the licensees premises in the distribution services area (insofar as not otherwise taken into account in determining units distributed under sub-paragraph (a) above).

|                                                        
|--------------------------------------------------------
|Initial relevant loss
        percentage in the term ALt

|    |                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E6. | In the first relevant year, the initial relevant loss percentage in the term ALt shall (consistently with the methodology set out in paragraphs E2 to E5 above) be deemed to be:

|                                                                   
|-------------------------------------------------------------------
|adjusted GSP purchase
        units less adjusted units distributed

| |                           
| | --------------------------
| | adjusted units distributed

| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | where adjusted GSP purchase units are calculated as provided in paragraph E7 and adjusted units distributed are calculated as provided in paragraph E8.

|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|E7. | Adjusted GSP purchase units shall be calculated in accordance with the procedures successively described in the following sub-paragraphs:

| |     |                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | the actual losses in each of relevant years t-1, t-2 and t-3 (the historical losses) shall be calculated as the difference in each of those years between units purchased at entry points to the licensees distribution system and units sold;

| |     |                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | the historical loss percentage shall be calculated as the proportion (expressed as a percentage) which the aggregate historic losses were of the aggregate units purchased at entry points to the licensees distribution system, in each case over the three relevant years t-1 to t-3;

| |     |                                                                                                                                      
| | --- | -------------------------------------------------------------------------------------------------------------------------------------
| | (c) | the total number of units sold in relevant year t-1 shall be grossed up by the historical loss percentage (BSP purchase units); and

| |     |                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) | the figure for BSP purchase units resulting from sub-paragraph (c) shall be adjusted to obtain adjusted GSP purchase units in accordance with the provisions of paragraphs E3 and E4 above.



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|E8. | Adjusted units distributed
        shall be calculated by applying the methodology of paragraph E5 in respect
        of those units referred to in sub-paragraphs (a) to (c) of paragraph E5
        in relevant year t-1.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                   
|---------------------------------------------------
|Information to be provided
        to the Authority

|    |                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E9. | The licensee shall within three months after the entry into force of this licence furnish to the Authority a statement showing the initial relevant loss percentage and the underlying calculations.

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E10. | The licensee shall, following the end of each relevant year, furnish to the Authority, as being one of the specified items to be included in the statement referred to at paragraph 7 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions), a statement showing adjusted distribution losses for that relevant year, accompanied by the underlying calculations and (where appropriate) an explanation of any changes in the basis of calculation or estimation thereof.

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E11. | Where the Authority is satisfied that any statement or underlying calculation provided has not been drawn up in conformity with paragraphs E2 to E8 above, the Authority may issue directions, and the statement or underlying calculation shall be adjusted with effect from the date of issue of the directions or (subject to paragraph 10 of Special Condition D (Information to be provided to the Authority in connection with the charge restriction conditions)) such other date as may be specified in the directions.



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SCHEDULE 1

SPECIFIED AREA

Great Britain



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SCHEDULE 2

|REVOCATION
|----------

|   |                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The Authority may at any time revoke the licence by giving no less than 30 days notice (24 hours notice, in the case of a revocation under sub-paragraph 1(f)) in writing to the licensee:

| |     |                                                                                         
| | --- | ----------------------------------------------------------------------------------------
| | (a) | if the licensee agrees in writing with the Authority that the licence should be revoked;

| |     |                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | if any amount payable under standard condition 3 (Payments by the licensee to the Authority) is unpaid 30 days after it has become due and remains unpaid for a period of 14 days after the Authority has given the licensee notice that the payment is overdue  provided that no such notice shall be given earlier than the sixteenth day after the day on which the amount payable became due;

| |     |                       
| | --- | ----------------------
| | (c) | if the licensee fails:

| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (i) | to comply with a final order (within the meaning of section 25 of the Act) or with a provisional order (within the meaning of that section) which has been confirmed under that section and (in either case) such failure is not rectified to the satisfaction of the Authority within three months after the Authority has given notice in writing of such failure to the licensee  provided that no such notice shall be given by the Authority before the expiration of the period within which an application under section 27 of the Act could be made questioning the validity of the final or provisional order or before the proceedings relating to any such application are finally determined; or

| |  |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii) | to pay any financial penalty (within the meaning of section 27A of the Act) by the due date for such payment and such payment is not made to the Authority within three months after the Authority has given notice in writing of such failure to the licensee  provided that no such notice shall be given by the Authority before the expiration of the period within which an application under section 27E of the Act could be made questioning the validity or effect of the financial penalty or before the proceedings relating to any such application are finally determined;

| |     |                                      
| | --- | -------------------------------------
| | (b) | if the licensee fails to comply with:

| |  |     |                                                                                                        
| |  | --- | -------------------------------------------------------------------------------------------------------
| |  | (i) | an order made by the Secretary of State under section 56, 73, 74 or 89 of the Fair Trading Act 1973; or

| |  |      |                                                                         
| |  | ---- | ------------------------------------------------------------------------
| |  | (ii) | an order made by the court under section 34 of the Competition Act 1998;

| |     |                 
| | --- | ----------------
| | (c) | if the licensee:

| |  |     |                                                  
| |  | --- | -------------------------------------------------
| |  | (i) | has ceased to carry on the distribution business;

| |  |      |                                                                                                                          
| |  | ---- | -------------------------------------------------------------------------------------------------------------------------
| |  | (ii) | has not commenced carrying on the distribution business within 5 years of the date on which the licence comes into force;



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| |     |                 
| | --- | ----------------
| | (d) | if the licensee:

| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (i) | is unable to pay its debts (within the meaning of section 123(1) or (2) of the Insolvency Act 1986, but subject to paragraphs 2 and 3 of this schedule) or has any voluntary arrangement proposed in relation to it under section 1 of that Act or enters into any scheme of arrangement (other than for the purpose of reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by the Authority);

| |  |      |                                                                                                                                                                                                                  
| |  | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | (ii) | has a receiver (which expression shall include an administrative receiver within the meaning of section 251 of the Insolvency Act 1986) of the whole or any material part of its assets or undertaking appointed;

| |  |       |                                                                                               
| |  | ----- | ----------------------------------------------------------------------------------------------
| |  | (iii) | has an administration order under section 8 of the Insolvency Act 1986 made in relation to it;

| |  |      |                                                                                                                 
| |  | ---- | ----------------------------------------------------------------------------------------------------------------
| |  | (iv) | passes any resolution for winding-up other than a resolution previously approved in writing by the Authority; or

| |  |     |                                                                                    
| |  | --- | -----------------------------------------------------------------------------------
| |  | (v) | becomes subject to an order for winding-up by a court of competent jurisdiction; or

| |     |                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------
| | (g) | if the licensee is convicted of having committed an offence under section 59 of the Act in making its application for the licence.

|   |                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | For the purposes of sub-paragraph 1(f)(i), section 123(1)(a) of the Insolvency Act 1986 shall have effect as if for £750 there was substituted £100,000 or such higher figure as the Authority may from time to time determine by notice in writing to the licensee.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | The licensee shall not be deemed to be unable to pay its debts for the purposes of sub-paragraph 1(f)(i) if any such demand as is mentioned in section 123(1)(a) of the Insolvency Act 1986 is being contested in good faith by the licensee with recourse to all appropriate measures and procedures or if any such demand is satisfied before the expiration of such period as may be stated in any notice given by the Authority under paragraph 1.



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SCHEDULE 3

|DISTRIBUTION SERVICES AREA
|--------------------------

|                                                                                                                                                                                                                                                                                                          | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|The
        distribution services area shall comprise that area which is outlined
        on the attached map and shall additionally include those premises listed
        in List A (the Additional Premises) but shall not include
        those premises listed in List B (the Excluded Premises).

|   |                    
|-- | -------------------
|A: | ADDITIONAL PREMISES
|   |                    

| | Address                              |  |  | Grid Ref:    | 
| | ------------------------------------ |  |  | ------------ | 
| |                                      |  |  |              | 
| | Congleton
        Youth Centre       |  |  | SJ 8658 6420 | 
| | Jacksons
        Road                |  |  |              | 
| | Eaton
        Bank                   |  |  |              | 
| | Congleton                            |  |  |              | 
| | CW12
        1NT                     |  |  |              | 
| |                                      |  |  |              | 
| | Dane
        Valley High School      |  |  | SJ 8655 6425 | 
| | Jacksons
        Road                |  |  |              | 
| | Eaton
        Bank                   |  |  |              | 
| | Congleton                            |  |  |              | 
| | CW12
        1NT                     |  |  |              | 
| |                                      |  |  |              | 
| | Eaton
        Bank Farm              |  |  | SJ 8652 6410 | 
| | Jacksons
        Road                |  |  |              | 
| | Eaton
        Bank                   |  |  |              | 
| | Congleton                            |  |  |              | 
| | CW12
        1PF                     |  |  |              | 
| |                                      |  |  |              | 
| | Eaton
        Bank Farm Cottage      |  |  | SJ 8650 6412 | 
| | Jacksons
        Road                |  |  |              | 
| | Eaton
        Bank                   |  |  |              | 
| | Congleton                            |  |  |              | 
| | CW12
        1PF                     |  |  |              | 
| |                                      |  |  |              | 
| | Building
        D                   |  |  | SJ 8670 6390 | 
| | Eaton
        Bank Trading Estate    |  |  |              | 
| | Congleton                            |  |  |              | 
| | CW12
        1PH                     |  |  |              | 
| |                                      |  |  |              | 
| | Building
        E                   |  |  | SJ 8650 6390 | 
| | Eaton
        Bank Trading Estate    |  |  |              | 
| | Congleton                            |  |  |              | 
| | CW12
        1PH                     |  |  |              | 
| |                                      |  |  |              | 
| | Halsall
        Lane Pumping Station |  |  | SJ 4080 0864 | 
| | Halsall
        Lane                 |  |  |              | 
| | Ormskirk                             |  |  |              | 
| | L39
        3AT                      |  |  |              | 



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|   |                   |          
|-- | ----------------- | ---------
|B: | EXCLUDED PREMISES |          
|   |                   |          
|   | Address           | Grid Ref:
|   | None              |          



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| |          | 
| | -------- | 
| | Page: 11 | 
| |          | 
| | [S1]     | 
| |          | 



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