Document:

Conformed Distribution License of SP Manweb plc

 Exhibit 4.8 
 SP MANWEB PLC 
 CONFORMED DISTRIBUTION LICENCE 
 Done 31a, 31b, 34,35,stc 3,9b,spcc1 
 Do BETTA Aug/March changes 
 APRIL 2006 WORKING COPY 
 April 2006 working copy - updated by Energy Networks Regulation to reflect licence modifications up to April 2006 

 Chronological list of amendments incorporated into this licence 
  

	1.	The modifications to the licence made by the Gas and Electricity Markets Authority under S.11A of the Electricity Act 1989 on the 25 July 2003; 

  

	2.	The modifications to the licence made by Gas and Electricity Markets Authority under S. 11A of the Electricity Act 1989 on the 7 November 2003; 

  

	3.	The modification to the licence made by the Gas and Electricity Markets Authority under S.11(1) of the Electricity Act 1989 on the 21 January 2004; 

  

	4.	The modification to the licence made by the Gas and Electricity Markets Authority under S.11A of the Electricity Act 1989 on the 2 July 2004; 

  

	5.	The amendments to the licence published by the Secretary of State under S.134 of the Energy Act 2004 on the 26 August 2004; and 

  

	6.	The modification to the standard conditions of the licence made by the Gas and Electricity Markets Authority under S.11A of the Electricity Act 1989 on 23 March 2005.

  

	7.	The modification to the special conditions of the licence made by the Gas and Electricity Markets Authority under S.11A of the Electricity Act 1989 on 23 March 2005

  

	8.	Modification to Standard Condition 4C made by the Gas and Electricity Markets Authority under S.11A of the Electricity Act 1989 on 23 November 2005. 

 

	9.	Modification to Standard Condition A3 made by the Gas and Electricity Markets Authority under S.11A of the Electricity Act 1989 on 20 December 2005. 

 

	10.	Modification of Special Condition C1 of SP Distribution’s licence under Section 11 of the Electricity Act 1989 on 13 February 2006 

  

	11.	Modifications of Standard Conditions (new Conditions 31 A and 31 B, omission of Conditions 34 and 35) under S11A of the Electricity Act 1989 on 22 February 2006.

  

	12.	Modification of Standard Conditions (new Condition 9b) under S11A of the Electricity Act 1989 on 5 April 2006. 

  

 2 

 CONTENTS 
  

			
	 Clause
	  	Page No
	 PRELIMINARY
	  	8
		
	 PART I. TERMS OF THE LICENCE
	  	8
		
	 PART II. THE STANDARD CONDITIONS
	  	10
		
	 PART III. AMENDMENTS TO STANDARD LICENCE CONDITIONS
	  	12
		
	 Standard Condition 1. Definitions and Interpretation
	  	13
		
	 Condition 2. Application of Section C (Distribution Services Obligations)
	  	41
		
	 Condition 3. Payments by Licensee to the Authority
	  	43
		
	 SECTION B. GENERAL
	  	46
		
	 Condition 4. Use of System Charging Methodology
	  	46
		
	 Condition 4A. Charges for Use of System
	  	50
		
	 Condition 4B. Connection Charging Methodology
	  	54
		
	 Condition 4C. Non-Discrimination in the Provision of Use of System and Connection to the System
	  	64
		
	 Condition 4D. Requirement to Offer Terms for Use of System and Connection
	  	66
		
	 Condition 4E. Functions of the Authority
	  	71
		
	 Condition 5. Distribution System Planning Standard and Quality of Service
	  	74
		
	 Condition 6. Safety and Security of Supplies Enquiry Service
	  	75
		
	 Condition 7. Provision of Information about Theft or Abstraction of Electricity, Damage and Meter Interference
	  	77
		
	 Condition 8. Provisions Relating to the Connection of Metering Equipment
	  	78
		
	 Condition 9. Distribution Code
	  	80
		
	 Condition 9A. Compliance with other Distribution Codes
	  	83
		
	 Condition 9B: Distribution Connection and Use of System Agreement
	  	84
		
	 Condition 10. Balancing and Settlement Code and NETA Implementation
	  	93
		
	 Condition 11. Change Co-ordination for BSC
	  	96
		
	 Condition 12. Settlement Agreement for Scotland
	  	97
		
	 Condition 12A. Not used
	  	98

  

 3 

			
	 Condition 13. Change Co-ordination for the Utilities Act 2000
	  	99
		
	Condition 14. Provision of the Metering Point Administration Service and Compliance with the Master Registration
Agreement	  	101
		
	 Condition 14A. Basis of Charges for Metering Point Administration Services: Requirements for Transparency
	  	103
		
	 Condition 14B. Non-Discrimination in the Provision of Metering Point Administration Services
	  	105
		
	 Condition 14C. Requirement to Offer Terms for the Provision of Metering Point Administration Services
	  	106
		
	 Condition 14D. Functions of the Authority
	  	108
		
	 Condition 15. Compliance with the Grid Code
	  	110
		
	 Condition 16. Security Arrangements
	  	111
		
	 Condition 17. Provision of Services for Persons who are of Pensionable Age or Disabled or Chronically Sick
	  	112
		
	 Condition 18. Provision of Services for Persons who are Blind or Deaf
	  	113
		
	 Condition 19. Code of Practice on Procedures with Respect to Site Access
	  	114
		
	 Condition 20. Payments in Relation to Standards of Performance
	  	115
		
	 Condition 21. Complaint Handling Procedure
	  	117
		
	 Condition 22. Preparation, Review of and Compliance with Customer Service Codes
	  	118
		
	 Condition 23. Record of and Report on Performance
	  	120
		
	 Condition 24. Provision of Information to the Authority
	  	121
		
	 Condition 25. Long Term Development Statement
	  	123
		
	 Condition 26. Compliance with CUSC
	  	127
		
	 Condition 27. Not used
	  	129
		
	 Condition 28. Not used
	  	130
		
	 Condition 29. Disposal of Relevant Assets
	  	131
		
	 Condition 30. Not used
	  	134
		
	 Condition 30A. Not used
	  	135
		
	 Condition 30B. BETTA run-off arrangements scheme
	  	136

  

 4 

			
	 Condition 30C. Not used
	  	142
		
	 Condition 31. Not used
	  	143
		
	 Condition 31A. Compulsory Acquisition of Land etc.
	  	144
		
	 Condition 31B. Other Powers etc.
	  	145
		
	 SECTION C. DISTRIBUTION SERVICES OBLIGATIONS
	  	146
		
	 Condition 32. Definitions of “data transfer catalogue”, “data transfer service” and “permitted
purpose”
	  	146
		
	 Condition 32A. Convenience Customers
	  	148
		
	 Condition 33. Not used
	  	149
		
	 Condition 34. Not used
	  	150
		
	 Condition 35. Not used
	  	151
		
	 Condition 36. Requirement to Offer Terms for the Provision of Basic Metering Services
	  	152
		
	 Condition 36A. Requirement to Offer Terms for the Provision of Data Services
	  	157
		
	 Condition 36B. Non-Discrimination in the Provision of Basic Metering Services and Data Services
	  	160
		
	 Condition 36C. Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency
	  	161
		
	 Condition 36D. Provision of Basic Metering and Data Services – Functions of the Authority
	  	163
		
	 Condition 37. The Metering Point Administration Service and the Master Registration Agreement
	  	165
		
	 Condition 38. Establishment of a Data Transfer Service
	  	167
		
	 Condition 39. Restriction on Use of Certain Information and Independence of the Distribution Business
	  	170
		
	 Condition 40. Appointment of Compliance Officer
	  	173
		
	 Condition 41. Prohibition of Cross-Subsidies
	  	176
		
	 Condition 42. Regulatory Accounts
	  	177
		
	 Condition 42A. Change of Financial Year
	  	182
		
	 Condition 43. Restriction on Activity and Financial Ring Fencing
	  	183

  

 5 

			
	Condition 44. Availability of Resources	  	186
		
	Condition 45. Undertaking from Ultimate Controller	  	189
		
	Condition 46. Credit Rating of the Licensee	  	190
		
	Condition 47. Indebtedness	  	191
		
	Condition 48. Last Resort Supply: Payment Claims	  	196
		
	Condition 49. Quality of Service Incentive Scheme and Associated Information	  	200
		
	Condition 50. Price Control Revenue Reporting and Associated Information	  	207
		
	Condition 51. Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding and Registered Power Zones	  	214
		
	Condition 52. Price Control Review Information	  	220
		
	SPECIAL CONDITIONS	  	
		
	SPECIAL CONDITION A1 – Definitions and interpretation	  	226
		
	SPECIAL CONDITION A2 – Scope of the charge restriction conditions	  	235
		
	SPECIAL CONDITION A3 – Arrangements for the recovery of uncertain costs	  	238
		
	SPECIAL CONDITION A4 – Duration of the charge restriction conditions	  	241
		
	SPECIAL CONDITION B1 – Restriction of distribution charges: demand use of system charges	  	243
		
	SPECIAL CONDITION B2 – Restriction of distribution charges: allowed pass through items	  	254
		
	SPECIAL CONDITION B3 – Restriction of distribution charges: total incentive revenue adjustment	  	264
		
	SPECIAL CONDITION C1 - Calculation of charge - restriction adjustments arising from the distribution losses incentive scheme	  	265
		
	SPECIAL CONDITION C2 – Calculation of charge restriction adjustments arising from performance in respect of quality of service - SP Distribution Limited	  	269
		
	SPECIAL CONDITION C3 – Calculation of charge restriction adjustments arising from the innovation funding incentive scheme	  	281

  

 6 

			
	SPECIAL CONDITION D1 – Restriction of distribution charges: generation use of system charges	  	283
		
	SPECIAL CONDITION D2 – Calculation of charge restriction adjustments arising from the incentive schemes for distributed generation and registered power zones	  	284
		
	SPECIAL CONDITION E1 – Charge restriction conditions: supplementary restrictions	  	288
		
	SPECIAL CONDITION F1 – Restriction of basic metering charges	  	290
		
	SPECIAL CONDITION G1 – Restriction of distribution charges outside the distribution services area	  	299
		
	SCHEDULE 1 SPECIFIED AREA	  	301
		
	SCHEDULE 2 REVOCATION	  	302
		
	SCHEDULE 3 DISTRIBUTION SERVICES AREA	  	305
		
	CONSENTS AND DIRECTIONS	  	306
		
	Direction issued under Condition 27 of the Public Electricity Supply Licence of Manweb plc now Standard Condition 29 of this licence (01.04.92)	  	307
		
	Direction issued under Condition 12 of the Public Electricity Supply Licence of Manweb plc now Standard Condition 39 of this licence (19.04.00)	  	311
		
	Direction issued under Condition 12 of the Public Electricity Supply Licence of Manweb plc now Standard Condition 39 of this licence (19.04.00)	  	315
		
	Direction issued under Condition 12 of the Public Electricity Supply Licence of Manweb plc now Standard Condition 39 of this licence (28.07.00)	  	318
		
	Consent issued under Standard Condition 47 of this licence (01.10.01)	  	322
		
	General Consent issued under Standard Condition 29 of this licence (01.10.01)	  	324
		
	Consent issued under Condition 9 of this licence	  	330
		
	Consent issued under Condition 29 of this licence	  	331
		
	Direction issued under Paragraph 10 of Special Condition G of the Distribution Licence	  	332
		
	DIRECTION UNDER PARAGRAPH 10 OF SPECIAL CONDITION G OF THE DISTRIBUTION LICENCE	  	333

  

 7 

 PRELIMINARY 
 PART I. TERMS OF THE LICENCE 
  

	1.	This licence, treated as granted under section 6(l)(c) of the Electricity Act 1989 (“the Act”) authorises Manweb plc (a company registered in England & Wales
under number 02366937 (“the licensee”) whose registered office is situated at Manweb House, Chester Business Park, Wrexham Road, Chester, CH4 9RF to distribute electricity for the purpose of giving a supply to any premises or enabling a
supply to be so given in the area specified in Schedule 1 during the period specified in paragraph 3 below, subject to:- 

  

	 	(a)	the standard conditions of electricity distribution of 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”); and 

  

	 	(c)	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 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 and as if for the words “this Act” there were substituted the
words “the licence”. 

  

	5.	Without prejudice to sections 11 and 23(1) of the Interpretation Act 1978, Parts 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. 

  

 8 

	7.	Pursuant to paragraph 6 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 28th September 2001 this licence was made and is treated as granted under section 6(l)(c) of the Electricity Act 1989. 
  

 9 

 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 33 [Not used]
		 	Standard condition 4C	 	Standard condition 34
		 	Standard condition 4D	 	Standard condition 35
		 	Standard condition 4E	 	Standard condition 36
		 	Standard condition 5	 	Standard condition 36A
		 	Standard condition 6	 	Standard condition 36B
		 	Standard condition 7	 	Standard condition 36C
		 	Standard condition 8	 	Standard condition 36D
		 	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 [Not used]	 	Standard condition 42
		 	Standard condition 13	 	Standard condition 42A
		 	Standard condition 14	 	Standard condition 43
		 	Standard condition 14A	 	Standard condition 44
		 	Standard condition 14B	 	Standard condition 45
		 	Standard condition 14C	 	Standard condition 46
		 	Standard condition 14D	 	Standard condition 47
		 	Standard condition 15	 	Standard condition 48
		 	Standard condition 16	 	Standard condition 49

  

 10 

					
	 Section A
	 	 Section B
	 	 Section C

		 	 Standard condition 17
	 	 Standard condition 50

		 	 Standard condition 18
	 	 Standard condition 51

		 	 Standard condition 19
	 	 Standard condition 52

		 	 Standard condition 20
	 	
		 	 Standard condition 21
	 	
		 	 Standard condition 22
	 	
		 	 Standard condition 23
	 	
		 	 Standard condition 24
	 	
		 	 Standard condition 25
	 	
		 	 Standard condition 26
	 	
		 	 Standard condition 27 [Not used]
	 	
		 	 Standard condition 28 [Not used]
	 	
		 	 Standard condition 29
	 	
		 	 Standard condition 30 [Not used]
	 	
		 	 Standard condition 30A [Not used]
	 	
		 	 Standard condition 30B
	 	
		 	 Standard condition 30C [Not used]
	 	
		 	 Standard condition 31 [Not used]
	 	

 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. 
  

 11 

 PART III. AMENDMENTS TO STANDARD LICENCE CONDITIONS 
  

 12 

 CONSOLIDATED STANDARD CONDITIONS 
 SECTION A. INTERPRETATION, APPLICATION AND PAYMENTS 
 Standard Condition 1. Definitions and
Interpretation 
  

	1.	In these standard conditions, unless the context otherwise requires: 

  

			
	the “Act”	  	means the Electricity Act 1989
		
	“affiliate”	  	in relation to the licensee, means any holding company of the licensee, any subsidiary of the licensee or any subsidiary of a holding company of the licensee, in each case within the meaning
of sections 736, 736A and 736B of the Companies Act 1985.
		
	“Application Regulations”	  	means the Electricity (Applications for Licences and Extensions and Restrictions of Licences) Regulations 2004, or any amendment or replacement thereof for the time being in force pursuant to
section 6A of the Act.
		
	“appropriate auditor”	  	for the purposes of Section C only, has the meaning given in paragraph 8 of standard condition 42 (Regulatory Accounts)
		
	“appropriate time”	  	for the purposes of standard condition 39 only (Restriction on Use of Certain Information and Independence of the Distribution Business), has the meaning given in that
condition.

  

 13 

			
	“auditors”	  	means the licensee’s auditors for the time being holding office in accordance with the requirements of the Companies Act 1985.
		
	“authorised”	  	in relation to any business or activity, means authorised by licence granted or treated as granted under section 6 of the Act, or by exemption granted under section 5 thereof.
		
	“authorised electricity operator”	  	means any person (other than the licensee) who is authorised to generate, participate in the transmission of, distribute or supply electricity and includes any person who has made an application
to be so authorised which has not been refused and any person transferring electricity to or from or across an interconnector or Scottish interconnection or who has made an application for use of an interconnector or Scottish interconnection which
has not been refused.
		
	“the Authority”	  	means the Gas and Electricity Markets Authority established under section 1 of the Utilities Act 2000.
		
	“basic meter asset provision”	  	for the purposes of Section C only, has the meaning given in paragraph 3(a) of standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services).
		
	“basic meter operation”	  	for the purposes of Section C only, has the meaning given in paragraph 3(b) of standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services).

  

 14 

			
	“BETTA”	  	means the British electricity trading and transmission arrangements, being those arrangements which are provided for in Chapter 1 of Part 3 of the Energy Act 2004.
		
	“BETTA go-live date”	  	means the date which the Secretary of State indicates in a direction shall be the BETTA go-live date.
		
	“British Grid Systems Agreement”	  	for the purposes of standard condition 30B (BETTA Run-off Arrangements Scheme) only, has the meaning given in that condition.
		
	“BSC”	  	for the purposes of Section B only, has the meaning given in standard condition 10 (Balancing and Settlement Code and NETA Implementation).
		
	“ BSC Framework Agreement”	  	for the purposes of standard condition 10 (Balancing and Settlement Code and NETA Implementation) only, has the meaning given in that condition.
		
	“bilateral agreement”	  	for the purposes of standard condition 26 (Compliance with CUSC) only, has the meaning given in that condition.
		
	“charge restriction conditions”	  	has the same meaning as in special condition A1 (Definitions and interpretation).

  

 15 

			
	“competent authority”	  	for the purposes of standard condition 39 (Restriction on Use of Certain Information and Independence of the Distribution Business) only, has the meaning given in that
condition.
		
	“confidential information”	  	for the purposes of standard condition 39 (Restriction on Use of Certain Information and Independence of the Distribution Business) only, has the meaning given in that
condition.
		
	“connection charges”	  	means charges made or levied, or to be made or levied, by the licensee for the provision of connections or the modification or retention of existing connections to the licensee’s
distribution system at entry or exit points, whether or not such charges or any part of them are annualised, and may include, as appropriate, costs relating to any of the matters that are mentioned in paragraph 5 of standard condition 4B (Connection
Charging Methodology).
		
	“connection charging methodology”	  	means the principles on which and the methods by which, for the purposes of achieving the objectives referred to in paragraph 3 of standard condition 4B (Connection Charging Methodology),
connection charges are determined.
		
	“construction agreement”	  	for the purposes of standard condition 26 (Compliance with CUSC) only, has the meaning given in that condition.

  

 16 

			
	“Consumer Council”	  	means the Gas and Electricity Consumer Council established under section 2 of the Utilities Act 2000.
		
	“convenience customers”	  	means customers supplied or requiring to be supplied at any premises which are directly connected to the licensee’s distribution system but are situated within the distribution services
area of a distribution services provider other than the licensee.
		
	“core industry documents”	  	for the purposes of standard conditions 10 (Balancing and Settlement Code and NETA Implementation) and 11 (Change Co-ordination for NETA) only, has the meaning given in standard condition 10;
and for the purposes of standard condition 26 Compliance with CUSC) only, has the meaning given in that condition.
		
	“cross-default obligation”	  	for the purposes of standard condition 47 (Indebtedness) and standard condition BA6 (Indebtedness) only, has the meaning given in that condition.
		
	“CUSC”	  	for the purposes of standard condition 26 (Compliance with CUSC) only, has the meaning given in that condition.
		
	“CUSC Framework Agreement”	  	for the purposes of standard condition 26 (Compliance with CUSC) only, has the meaning given in that condition.
		
	“customer”	  	for the purposes of standard condition 49 (Quality of Service Incentive Scheme and Associated Information) and special condition C2 (Calculation of the charge restriction adjustments arising
from performance in respect of quality of service) only, has the meaning given in the quality of service rigs, otherwise, means any person supplied or requiring to be supplied with electricity at any premises in Great Britain, but does not include
any authorised electricity operator in its capacity as such.

  

 17 

			
	“data aggregation”	  	has the meaning given in standard condition 36A (Requirement to Offer Terms for the Provision of Data Services).
		
	“data processing”	  	has the meaning given in standard condition 36A (Requirement to Offer Terms for the Provision of Data Services).
		
	“data retrieval”	  	has the meaning given in standard condition 36A (Requirement to Offer Terms for the Provision of Data Services).
		
	“data services”	  	for the purposes of Section C only, has the meaning given in standard condition 36A (Requirement to Offer Terms for the Provision of Data Services).
		
	“data transfer service”	  	for the purposes of Section C only, has the meaning given in standard condition 32 (Interpretation of Section C (Distribution Services Obligations)).
		
	“declared net capacity”	  	means, in relation to generation plant, the highest generation of electricity at the main alternator terminals which can be maintained for an indefinite period of time without causing damage to
the plant, less so much of that capacity as is consumed by the plant.

  

 18 

			
	“de minimis business”	  	for the purposes of Section C only, has the meaning given in paragraph 4(a) of standard condition 43 (Restriction on Activity and Financial Ring Fencing)
		
	“DG”	  	for the purposes of standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding, and Registered Power Zones) only, has the same meaning
as in special condition A1 (Definitions and interpretation).
		
	“DG rigs”	  	for the purposes of standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding and Registered Power Zones) only, means the regulatory
instructions and guidance for the time being in force in relation to the incentive schemes established under that condition.
		
	“directly connected”	  	in relation to any premises, means so connected to the licensee’s distribution system that the final connection to the premises is from that system (and “indirectly connected”
means other than directly connected).
		
	“disposal”	  	for the purposes of standard condition 29 (Disposal of Relevant Assets) only, has the meaning given in that condition.

  

 19 

			
	“distribution arrangements”	  	has the meaning given in standard condition 25 (Long Term Development Statement).
		
	“distribution business”	  	 means a business of the licensee or, in relation to sub paragraphs (a) and (c), of any affiliate or related undertaking of the licensee, which
(except to the extent otherwise specified by the Authority in a direction to the licensee) comprises any of the following activities:
  
 (a)     the distribution of electricity through the licensee’s distribution system, including any
business in providing connections to such system;
  
 (b)     the provision of the services specified in paragraph 3 of standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services); or
  
 (c)     the provision of the
services specified in paragraphs 2(a) and 2(b) of standard condition 36A (Requirement to Offer Terms for the Provision of Data Services), and in any of the above cases includes any business ancillary thereto.

		
	“distribution business activities”	  	 means those activities of the licensee which comprise the following:
  

(a) distribution services, (excluding metering services);
  
 (b) metering services;
  
 (c) de minimis business; and
  
 (d) excluded
services.

  

 20 

			
	“Distribution Code”	  	means a distribution code required to be prepared by a licensed distributor pursuant to standard condition 9 (Distribution Code) and approved by the Authority as revised from time to time
with the approval of the Authority.
		
	“distribution licence”	  	means a licence granted or treated as granted under section 6(1)(c) of the Act.
		
	“distribution services”	  	means all services provided by the licensee as part of its distribution business other than excluded services.
		
	“distribution services area”	  	has the meaning given at paragraph 5(b) of standard condition 2 (Application of Section C (Distribution Services Obligations)).
		
	“Distribution Services Direction”	  	has the meaning given in standard condition 2 (Application of Section C (Distribution Services Obligations)).
		
	“distribution services provider”	  	means a licensed distributor in whose licence Section C has effect.

  

 21 

			
		
	“distribution system”	  	means the system consisting (wholly or mainly) of electric lines owned or operated by an authorised distributor and used for the distribution of electricity from grid supply points or generation
sets or other entry points to the points of delivery to customers or authorised electricity operators or any transmission licensee within Great Britain in its capacity as operator of a transmission system, and includes any remote transmission assets
(owned by a transmission licensee within England and Wales) operated by such distributor and any electrical plant, meters and metering equipment owned or operated by such distributor in connection with the distribution of electricity, but does not
include any part of a transmission system.
		
	“domestic customer”	  	means a customer supplied or requiring to be supplied with electricity at domestic premises (but excluding such customer insofar as he is supplied or requires to be supplied at premises other
than domestic premises).
		
	“domestic premises”	  	 means premises at which a supply is taken wholly or mainly for domestic purposes.
 “Electricity Arbitration Association” for the purposes of standard condition 39 (Restriction on Use of Certain Information and Independence of the Distribution Business) only, has the meaning given in that
condition.

		
	“electricity supplier”	  	means any person authorised to supply electricity. for the purposes of standard condition 3 (Payments by the Licensee to the Authority)

  

 22 

			
	“estimated costs”	  	only, has the meaning given in that condition.
		
	“excluded services”	  	means those services provided by the licensee as part of its distribution business which in accordance with special condition A2 (Scope of the charge restriction conditions) fall to be treated
as excluded services.
		
	“existing connection”	  	means, in relation to any premises, an existing connection to the licensee’s distribution system which does not require modification, or a new or modified connection to such system in
respect of which all works have been completed, such that in either case electricity is able to be supplied to the premises in accordance with the terms of the relevant supply agreement.
		
	“external distribution activities”	  	 for the purposes of standard condition 39 (Restriction on Use of Certain Information and Independence of the Distribution Business) only, has the
meaning given in that condition.
 “financial year” subject to standard condition 42A (Change of Financial Year) (where applicable), means a period
of 12 months beginning on 1 April of any year and ending on 31 March of the following calendar year.

		
	“Fuel Security Code”	  	for the purposes of Section B only, has the meaning given in standard condition 16 (Security Arrangements).
		
	“generation set”	  	means any plant or apparatus for the production of electricity and where appropriate includes a generating station comprising more than one generation set.

  

 23 

			
	“Grid Code”	  	means a Grid Code which a transmission licensee is required to have in place pursuant to its transmission licence.
		
	“grid supply point”	  	means any point at which electricity is delivered from a transmission system to any distribution system.
		
	“holding company”	  	means a company within the meaning of sections 736, 736A and 736B of the Companies Act 1985.
		
	“indebtedness”	  	for the purposes of standard condition 47 (Indebtedness) and standard condition BA6 (Indebtedness) only, has the meaning given in that condition.
		
	“information”	  	means information (other than information that is subject to legal privilege) in any form or medium whatsoever and of any description specified by the Authority, and includes any documents,
accounts, estimates, returns, records or reports and data of any kind, whether or not prepared specifically at the request of the Authority.
		
	“interconnection”	  	means: the 275 kV and 400 kV circuits between and including the associated switchgear at Harker substation in Cumbria and the associated switchgear at Strathaven substation in
Lanarkshire;
		
		  	the 275 kV transmission circuit between and including the associated switchgear at Cockenzie in East Lothian and

  

 24 

			
		 	 the associated switchgear at Stella in Tyne and Wear; and the 400 kV transmission circuit between and including the associated switchgear at Torness
in East Lothian and the associated switchgear at Stella in Tyne and Wear;
  
 all as
existing at the date on which the transmission licence comes into force as from time to time maintained, repaired or renewed, together with any alteration, modification or addition (other than for the purposes of maintenance, repair or renewal)
which is primarily designed to effect a permanent increase in one or more particular interconnection capacities as they exist immediately prior to such alteration, modification or addition and as from time to time maintained, repaired or renewed;
and
  
 the 132 kV transmission circuit between and including (and directly connecting) the
associated switchgear at Chapelcross and the associated switchgear at Harker substation in Cumbria; and
  
 the 132 kV transmission circuit between and including (and connecting, via Junction V) the associated switchgear at Chapelcross and the associated switchgear at Harker substation in Cumbria,
  
 all as existing at the date on which the transmission licence comes into force and as from time to
time maintained, repaired or renewed.

  

 25 

			
	“interconnector”	  	means the electric lines and electrical plant and meters owned or operated by a transmission licensee solely for the transfer of electricity to or from a transmission system into or out of
England and Wales.
		
	“investment”	  	 for the purposes of Section C only, has the meaning given in standard condition 43 (Restriction on Activity and Financial Ring Fencing);
and
  
 for the purposes of Section BA only, has the meaning given in standard condition
BA2 (Restriction on Activity and Financial Ring Fencing).

		
	“investment grade issuer credit rating”	  	 for the purposes of Section C only, has the meaning given in standard condition 46 (Credit Rating of the Licensee); and
  
 for the purposes of Section BA only, has the meaning given in standard condition BA5 (Credit Rating
of Licensee).

		
	“issuer credit rating”	  	for the purposes of Section C only, has the meaning given in standard condition 46 (Credit Rating of the Licensee)
		
	“licensed distributor”	  	means any holder of a distribution licence.
		
	“licensee’s Distribution Code”	  	means the distribution code required to be prepared by the licensee pursuant to standard condition 9 (Distribution Code) and approved by the Authority as revised from time to time with the
approval of the Authority.

  

 26 

			
	“licensee’s distribution system”	  	means the distribution system owned or operated by the licensee.
		
	“Master Registration Agreement”	  	means the agreement of that title referred to and comprising such matters as are set out in standard condition 14 (Provision of the Metering Point Administration Service and Compliance with
the Master Registration Agreement) and standard condition 37 (The Metering Point Administration Service and the Master Registration Agreement).
		
	“metering equipment”	  	includes any electricity meter and any associated equipment which materially affects the operation of that meter.
		
	“Metering Point Administration Service”	  	means the service to be established, operated and maintained by the licensee in accordance with standard condition 14 (Provision of the Metering Point Administration Service and Compliance
with the Master Registration Agreement).

  

 27 

			
	“metering point administration services”	  	means the services of the Metering Point Administration Service established in accordance with standard condition 14 (Provision of the Metering Point Administration Service and Compliance with
the Master Registration Agreement) or, where the context requires, in accordance with standard condition 37 (The Metering Point Administration Service and the Master Registration Agreement).
		
	“Metering Point Administration Service operator”	  	has the meaning given in standard condition 38 (Establishment of a Data Transfer Service).
		
	“metering services”	  	means services relating to the provision, operation and maintenance of metering equipment.
		
	“non-domestic customer”	  	means a customer who is not a domestic customer.
		
	“non-GB trading and transmission arrangements”	  	for the purposes of standard condition 30B (BETTA Run-off Arrangements Scheme) only, has the meaning given in that condition.
		
	“other Distribution Codes”	  	means the Distribution Codes which the holders of a distribution licence (other than the licensee) are required to draw up and have approved by the Authority pursuant to Standard Condition 9.
(Distribution Code) of their distribution licence, as from time to time revised with the approval of the Authority.
		
	“owned”	  	in relation to an electricity meter or other property, includes leased and cognate expressions shall be construed accordingly.
		
	“participating interest”	  	has the meaning given by section 260 of the Companies Act 1985 as amended by section 22 of the Companies Act 1989.

  

 28 

			
	“permitted purpose”	  	 for the purposes of Section C only, has the meaning given in standard condition 32 (Interpretation of Section C (Distribution Services Obligations));
and
 for the purposes of Section BA only, has the meaning given in standard condition BA2 (Restriction on Activity and Financial Ring
Fencing).

		
	“price control review information”	  	for the purposes of standard condition 52 (Price Control Review Information) only, has the meaning given in that condition.
		
	“quality of service rigs”	  	for the purposes of standard condition 49 (Quality of Service Incentive Scheme and Associated Information) only, means the regulatory instructions and guidance established under that
condition.
		
	“regulatory instructions and guidance”	  	for the purposes of Section C only, means any instructions and guidance issued by the Authority in relation to the collection and reporting of specified information.
		
	“related undertaking”	  	in relation to the licensee, means any undertaking in which the licensee has a participating interest.
		
	“relevant asset”	  	means any asset for the time being forming part of the licensee’s distribution system, any control centre for use

  

 29 

			
		  	in conjunction therewith, and any legal or beneficial interest in land upon which any of the foregoing is situate (which, for the purposes of property located in Scotland, means any estate,
interest, servitude or other heritable or leasehold right in or over land including any leasehold interests or other rights to occupy or use such property and any contractual or personal rights relating to such property or the acquisition
thereof).
		
	“relevant documents”	  	for the purposes of standard condition 30B (BETTA Run-off Arrangements Scheme) only, has the meaning given in that condition.
		
	“relevant duties”	  	for the purposes of standard condition 40 (Appointment of a Compliance Officer) only, has the meaning given in that condition.
		
	“relevant proportion”	  	for the purposes of standard condition 3 (Payments by Licensee to the Authority) only, has the meaning given in that condition.
		
	“relevant year”	  	 for the purposes of:
  
 (i) standard condition 3 (Payments by the Licensee to the Authority) only, has the meaning given in that condition;
  
 (ii) standard condition 48 (Last Resort Supply: Payment Claims) only, has the meaning given in that
condition; and
  
 (iii) standard condition 50 (Price Control Revenue Reporting and
Associated Information) only, has the meaning given in that condition.

  

 30 

			
		
	“relinquishment of operational control”	  	for the purposes of standard condition 29 (Disposal of Relevant Assets) only, has the meaning given in that condition.
		
	“remote transmission assets”	  	 means any electric lines, electrical plant or meters in England and Wales owned by a transmission licensee (“the owner transmission
licensee”) which:
  
 (a) are embedded in the licensee’s distribution system or
the distribution system of any authorised distributor and are not directly connected by lines or plant owned by the owner transmission licensee to a sub-station owned by the owner transmission licensee; and
  
 (b) are by agreement between the owner transmission licensee and the licensee or such authorised
distributor operated under the direction and control of the licensee or such authorised distributor.

		
	“revenue reporting rigs”	  	for the purposes of standard condition 50 (Price Control Revenue Reporting and Associated Information) only, means the regulatory instructions and guidance for the time being in force under that
condition.
		
	“running-off”	  	for the purposes of standard condition 30B (BETTA Run-off Arrangements Scheme) only, has the meaning given in that condition.
		
	“Scottish Grid Code”	  	means any grid code which any transmission licensee other than the system operator is obliged to maintain pursuant to its licence.

  

 31 

			
	“Scottish interconnection”	  	means such part of the interconnection as is situated in Scotland.
		
	“Secretary of State’s costs”	  	for the purposes of standard condition 3 (Payments by Licensee to the Authority) only, has the meaning given in that condition.
		
	“Section C (system operator standard conditions) Direction”	  	means a direction issued by the Authority or (where appropriate) the Secretary of State in accordance with standard condition A2 (Application of Section C) of the standard conditions for
transmission licences.
		
	“separate business”	  	for the purposes of standard condition 39 only (Restriction on Use of Certain Information and Independence of the Distribution Business), has the meaning given in that
condition.
		
	“Settlement Agreement for Scotland”	  	has the meaning given in standard condition 12 (Settlement Agreement for Scotland).
		
	“settlement purposes”	  	means for the purposes of settlement as set out in the Balancing and Settlement Code or the Settlement Agreement for Scotland.
		
	“specified information”	  	 for the purposes of:
  
 (a) standard condition 49 (Quality of Service Incentive Scheme and Associated Information) only, has the meaning given in that condition;

  

 32 

			
		  	 (b) standard condition 50 (Price Control Revenue Reporting and Associated Information) only, has the meaning given in that condition; and

 
 (c) standard condition 51 (Incentive Schemes and Associated Information for Distributed
Generation, Innovation Funding and Registered Power Zones) only, has the meaning given in that condition.

	“standby”	  	 means the periodic or intermittent supply or sale of electricity:
  

(a) to an authorised electricity operator to make good any shortfall in the availability of electricity to that operator for the purposes of its supply of electricity
to persons seeking such supply; or
  
 (b) to a customer of the licensee to make good any
shortfall between the customer’s total supply requirements and those met either by its own generation or by electricity supplied by an electricity supplier.

		
	“statutory accounts”	  	means the accounts that the licensee prepares under the Companies Act 1985 (as amended by the Companies Act 1989).
		
	“subsidiary”	  	means a subsidiary within the meanings of sections 736, 736A and 736B of the Companies Act 1985.
		
	“supply licence”	  	means a licence granted or treated as granted under section 6(1)(d) of the Act.

  

 33 

			
	“system operator”	  	means the holder for the time being of a transmission licence in relation to which the Authority or (where appropriate) the Secretary of State has issued a Section C (system operator standard
conditions) Direction and in which Section C remains in effect (whether or not subject to any terms included in that direction or to any subsequent variation of its terms to which the transmission licensee may be subject).
		
	“system operator agreement”	  	for the purposes of standard condition 30B (BETTA Run-off Arrangements Scheme) only, has the meaning given in that condition.
		
	“top-up”	  	 means the supply or sale of electricity on a continuing or regular basis:
  
 (a) to an authorised electricity operator to make good any shortfall in the availability of
electricity to that operator for the purposes of its supply of electricity to persons seeking such supply; or
  
 (b) to a customer of the licensee to make good any shortfall between the customer’s total supply requirements and those met either by its own generation or by electricity supplied by an electricity supplier other
than the licensee.

		
	“trading code”	  	for the purposes of Section B only, has the meaning given in standard condition 12A (Compliance with Trading Code in Scotland).

  

 34 

			
	“transmission company”	  	means a transmission licensee.
		
	“transmission licence”	  	means a licence granted or treated as granted under section 6(1)(b) of the Act.
		
	“transmission licensee”	  	means the holder for the time being of a transmission licence.
		
	“transmission system”	  	means a system consisting (wholly or mainly) of high voltage electric lines owned or operated by a transmission company and used for the transmission of electricity from one generating station
to a substation or to another generating station, or between substations or to or from any interconnector or Scottish interconnection in question and in relation to Scotland including any interconnector and Scottish interconnection, and includes any
electrical plant and meters owned or operated by the transmission company in connection with the transmission of electricity but does not include any remote transmission assets.
		
	“ultimate controller”	  	 means:
  
 (a) a holding company of the licensee which is not itself a subsidiary of another company; and
  
 (b) any person who (whether alone or with a person or persons connected with him) is in a position to control, or to exercise significant influence over, the policy of
the licensee or of any holding company of the licensee by virtue of:
  
 (i) rights under
contractual arrangements to which he is a party or of which he is a beneficiary, or

  

 35 

			
		  	 (ii) rights of ownership (including rights attached to or deriving from securities or rights under a trust) which are held by him or of which he
is a beneficiary,
  
 but excluding any director or employee of a corporate body in his
capacity as such;
  
 and for the purposes of sub-paragraph
  
 (b), a person is connected with another person if he is party to any arrangement regarding the
exercise of any such rights as are described in that paragraph.

		
	“undertaking”	  	has the meaning given by section 259 of the Companies Act 1985.
		
	“unmetered supply”	  	means a supply of electricity to premises which is not, for the purpose of calculating the charges for electricity supplied to the customer at such premises, measured by metering
equipment.
		
	“use of system”	  	means use of the licensee’s distribution system for the distribution of electricity by the licensee on behalf of any person.
		
	“use of system charges”	  	means charges made or levied, or to be made or levied, by the licensee for the provision of services as part of the distribution business to any person, all as more fully described in standard
conditions 4 (Use of System Charging Methodology) and 4A (Charges for Use of System), but does not include connection charges.

  

 36 

			
	“use of system charging methodology”	  	means the principles on which and the methods by which, for the purposes of achieving the objectives referred to in paragraph 3 of standard condition 4 (Use of System Charging Methodology),
use of system charges are determined.

  

	2.	Any words or expressions used in Part 1 of the Act, the Utilities Act 2000 or the Energy Act 2004 shall, unless the contrary intention appears, have the same meanings when used in
the standard conditions. 

  

	3.	Except where the context otherwise requires, any reference to a numbered standard condition (with or without a letter) or schedule is a reference to the standard condition (with or
without a letter) or schedule bearing that number in this licence, and any reference to a numbered paragraph (with or without a letter) is a reference to the paragraph bearing that number in the standard condition or schedule in which the reference
occurs, and any reference to a section is a reference to that section in these standard conditions. 

  

	4.	These standard conditions shall have effect as if, in relation to a licence holder who is a natural person, for the words “it”, “its” and “which” there
were substituted the words “he”, “him”, “his”, “who” and “whom”, and cognate expressions shall be construed accordingly. 

  

	5.	Except where the context otherwise requires, a reference in a standard condition to a paragraph is a reference to a paragraph of that standard condition and a reference in a
paragraph to a sub-paragraph is a reference to a sub-paragraph of that paragraph. 

  

 37 

	6.	Any reference in these standard conditions to: 

  

	 	(a)	a provision thereof; 

  

	 	(b)	a provision of the standard conditions of electricity supply licences; 

  

	 	(c)	a provision of the standard conditions of electricity generation licences; or 

  

	 	(d)	a provision of the standard conditions of electricity transmission licences, 

 shall, if these standard conditions 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 standard conditions
or of the other standard conditions in question as modified. 
  

	7.	In construing these standard conditions, the heading or title of any standard condition or paragraph shall be disregarded. 

  

	8.	Any reference in a standard condition to the purposes of that condition generally is a reference to the purposes of that standard condition as incorporated in this licence and as
incorporated in each other licence under section 6(1)(c) of the Act (whenever granted) which incorporates it. 

  

	9.	Where any obligation of the licence is required to be performed by a specified date or time, or within a specified period, and the licensee has failed so to perform, such obligation
shall continue to be binding and enforceable after the specified date or time, or after the expiry of the specified period (but without prejudice to all the rights and remedies available against the licensee by reason of the licensee’s failure
to perform by that date or time, or within that period). 

  

 38 

	10.	Anything required by or under these standard conditions to be done in writing may be done by facsimile transmission of the instrument in question or by other electronic means and,
in such case: 

  

	 	(a)	the original instrument or other confirmation in writing shall be delivered or sent by pre-paid first-class post as soon as is reasonably practicable; and 

 

	 	(b)	where the means of transmission had been agreed in advance between the parties concerned, in the absence of and pending such confirmation, there shall be a rebuttable presumption
that what was received duly represented the original instrument. 

  

	11.	The definitions set out in this condition may include some definitions which are not used or not used exclusively in sections A and B (which sections are incorporated in all
distribution licences). Accordingly: 

  

	 	(a)	where any definition is not used in sections A and B, that definition shall, for the purposes of this licence, be treated: 

  

	 	(i)	as part of the standard condition or conditions (and the section) in which it is used; and 

  

	 	(ii)	as not having effect in the licence until such time as the standard condition in which the definition is used has effect within the licence in pursuance of standard condition 2
(Application of Section C (Distribution Services Obligations)); 

 and: 
  

 39 

	 	(b)	where any definition which is used in sections A and B is also used in one or more other sections: 

  

	 	(i)	that definition shall only be modifiable in accordance with the modification process applicable to each of the standard conditions in which it is used; and 

 

	 	(ii)	if any such standard condition is modified so as to omit that definition, then the reference to that definition in this condition shall automatically cease to have effect.

  

 40 

 Condition 2. Application of Section C (Distribution Services Obligations) 
  

	1.	Where the Secretary of State provides, by a scheme made under Schedule 7 to the Utilities Act 2000, for Section C (in whole or in part) to have effect within this licence:

  

	 	(a)	paragraphs 4 to 8 shall cease to be suspended and shall have effect in the licensee’s licence; and 

  

	 	(b)	the licensee shall be obliged to comply with the requirements of Section C (in whole or, as the case may be, in part) of this licence, 

 from the date the said scheme takes effect. Such provision made by the Secretary of State in the said scheme shall be treated, for the purposes of
paragraphs 5, 6, and 7 of this condition, as if it were a Distribution Services Direction made by the Authority. 
  

	2.	Until - 

  

	 	(a)	the Secretary of State provides, by a scheme made under Schedule 7 to the Utilities Act 2000, for Section C (in whole or in part) to have effect within this licence; or

  

	 	(b)	the Authority has issued to the licensee a direction pursuant to paragraph 4, 

 the standard conditions in Section C (in whole or, as the case may be, in part) shall not have effect within this licence; and the licensee shall not be obliged to comply with any of the requirements of Section C (in
whole or, as the case may be, in part) of this licence. 
  

	3.	Except where paragraph 1 applies to the licensee, paragraphs 4 to 8 of this standard condition shall be suspended and shall have no effect in this licence until such time as the
Authority, with the consent of the licensee, issues to the licensee a notice ending the suspension and providing for those paragraphs to have effect in this licence with effect from the date specified in the notice. 

  

 41 

	4.	The Authority may, with the consent of the licensee, issue a direction (a “Distribution Services Direction”). Where the Authority has issued to the licensee a Distribution
Services Direction the standard conditions in Section C (in whole or, as the case may be, in part) shall have effect within this licence from the date specified in the direction; and the licensee shall be obliged to comply with the requirements of
Section C (in whole or, as the case may be, in part) to the extent and subject to the terms specified in such direction. 

  

	5.	A Distribution Services Direction: 

  

	 	(a)	may specify that the standard conditions in Section C (in whole or in part) are to have effect in this licence; 

  

	 	(b)	shall specify or describe an area (the “distribution services area”) within which the licensee shall be obliged to comply with any of the requirements of Section C (in
whole or, as the case may be, in part); and 

  

	 	(c)	shall specify whether or not the requirements of Section C (in whole or, as the case may be, in part) apply to convenience customers. 

  

	6.	The Authority may, with the consent of the licensee: 

  

	 	(a)	vary the terms (as set out in the Distribution Services Direction or elsewhere) under which Section C (or parts thereof) has effect in this licence; or 

  

	 	(b)	provide for Section C (or parts thereof) to cease to have effect in this licence. 

  

	7.	The variation or cessation provided for in paragraph 6 shall take effect from the date specified in the variation or cessation notice given to the licensee by the Authority.

  

	8.	With effect from the date of cessation referred to in paragraph 7, paragraphs 4 to 7 of this condition shall be suspended and shall cease to have effect in this licence, but the
Authority may at any time thereafter, with the consent of the licensee, give to the licensee a notice ending the suspension and providing for those paragraphs to have effect again in this licence with effect from the date specified in the notice.

  

 42 

 Condition 3. Payments by Licensee to the Authority 
  

	1.	The licensee shall, at the times stated, pay to the authority such amounts as are determined by or under this condition. 

  

	2.	In respect of each relevant year at the beginning of which the licensee holds this licence, the licensee shall pay to the Authority the aggregate of: 

  

	 	(a)	an amount which is the relevant proportion of the estimated costs of the Authority during the year in question; 

  

	 	(b)	an amount which is the relevant proportion of the estimated costs of the Consumer Council during the year in question; 

  

	 	(c)	an amount which is the relevant proportion of the estimated costs incurred in the previous relevant year by the Competition Commission in connection with references made to it with
respect to the licence or any other electricity distribution licence; 

  

	 	(d)	an amount which is the relevant proportion of the difference (being a positive or negative amount), if any, between: 

 (aa) any costs estimated by the Authority in the previous relevant year under sub-paragraphs 2(a), (b) and (c); and 
 (bb) the actual costs of the Authority, the Consumer Council and the Competition Commission (in connection with that reference) for the previous relevant
year or, in the case of the Competition Commission, for the relevant year prior to the previous relevant year. 
  

	3.	The amounts determined in accordance with paragraph 2 shall be paid by the licensee to the Authority in two instalments, with: 

  

	 	(a)	the first instalment being due for payment by 30 June in each year; 

 and 
  

 43 

	 	(b)	the second instalment being due for payment by 31 January in each 

 year 
 provided that, in each case, if the Authority has not given notice of the amount of the instalment due
at least 30 days before the payment date stated above, the licensee shall pay the amount due within 30 days from the actual giving of notice by the Authority to the licensee (whenever notice is given). 
  

	4.	Where the licensee fails to pay the amount determined in accordance with paragraph 2 within 30 days of the due date set out in paragraph 3, it shall pay simple interest on the
amount at the rate which is from time to time equivalent to the base rate of NatWest Bank plc or, if there is no such base rate, such base rate as the Authority may designate for the purposes hereof. 

  

	5.	In this condition: 

  

			
	“estimated costs”	  	means costs estimated by the Authority as likely to be:
		
		  	 (a)      the costs of-

		
		  	 (i) the Authority calculated in accordance with principles determined by the Authority for the purposes of this condition generally (after consultation with the
licensee and others likely to be affected by the application of such principles) and notified to the licensee; and

		
		  	 (ii) the Consumer Council; and

		
		  	 (b)      the costs incurred by the Competition Commission;

		
	“relevant proportion”	  	means the proportion of the costs attributable to the licensee in accordance with principles determined by the Authority for the purposes of this condition generally (after consultation with
the licensee and others likely to be affected by the application of those principles) and notified to the licensee or, in relation to the costs of the Competition Commission, in accordance with any direction given by the Competition Commission under
section 177(3) of the Energy Act 2004 or, in the absence of such direction, in accordance with such principles; and

  

 44 

			
	“relevant year”	  	means a year beginning on 1 April of each calendar year and ending on 31 March of the following calendar year.

  

 45 

 SECTION B. GENERAL 
 Condition 4. Use of System Charging Methodology 
  

	1.	The licensee shall, by 1 April 2005: 

  

	 	(a)	determine and prepare a statement of a use of system charging methodology, approved by the Authority, that achieves the relevant objectives; and 

  

	 	(b)	comply with the use of system charging methodology at that date and as modified from time to time thereafter in accordance with the provisions of this condition.

  

	2.	The licensee shall, for the purpose of ensuring that the use of system charging methodology continues to achieve the relevant objectives: 

  

	 	(a)	review the use of system charging methodology at least once in every year; and 

  

	 	(b)	subject to paragraph 4, make such modifications (if any) of the use of system charging methodology as are necessary for the purpose of better achieving the relevant objectives.

  

	3.	For the purposes of this condition, the relevant objectives are: 

  

	 	(a)	that compliance with the use of system charging methodology facilitates the discharge by the licensee of the obligations imposed on it under the Act and by this licence;

  

	 	(b)	that compliance with the use of system charging methodology facilitates competition in the generation and supply of electricity, and does not restrict, distort, or prevent
competition in the transmission or distribution of electricity; 

  

 46 

	 	(c)	that compliance with the use of system charging methodology results in charges which reflect, as far as is reasonably practicable (taking account of implementation costs), the costs
incurred by the licensee in its distribution business; and 

  

	 	(d)	that, so far as is consistent with sub-paragraphs (a), (b) and (c), the use of system charging methodology, as far as is reasonably practicable, properly takes account of
developments in the licensee’s distribution business. 

  

	4.	Except with the consent of the Authority, before making a modification of the use of system charging methodology the licensee shall: 

  

	 	(a)	give the Authority a report which sets out; 

  

	 	(i)	the terms proposed for the modification; 

  

	 	(ii)	how the modification would better achieve the relevant objectives; and 

  

	 	(iii)	a timetable for implementing the modification and the date with effect from which the modification (if made) is to take effect, being not earlier than the date on which the period
referred to in paragraph 6 will expire; and 

  

	 	(b)	where the Authority has directed that sub-paragraph (a) should not apply, comply with such other requirements (if any) as the Authority may specify in its direction.

  

	5.	Subject to paragraph 6, where the licensee has complied with the requirements of paragraph 4, it shall, before making the modification: 

  

	 	(a)	revise the statement (or the most recent revision thereof) issued under paragraph 1(a) of this condition so that the statement sets out the changed use of system charging
methodology and specifies the date from which it is to have effect; and 

  

 47 

	 	(b)	give the Authority a copy of the revised statement. 

  

	6.	The licensee shall make the modification to the use of system charging methodology unless, within 28 days of receiving the licensee’s report under paragraph 4, the Authority,
having particular regard to the relevant objectives, has either: 

  

	 	(a)	directed the licensee not to make the modification; or 

  

	 	(b)	notified the licensee that it intends to consult and then within three months of giving that notification has directed the licensee not to make the modification.

  

	7.	The licensee shall give or send a copy of any statement under paragraph 1(a) or report under paragraph 4 to any person who requests it. 

  

	8	The licensee may make a charge for any statement or report given or sent pursuant to paragraph 7 of an amount which does not exceed the amount specified in directions issued by the
Authority for the purposes of this condition based on the Authority’s estimate of the licensee’s reasonable costs of providing the document. 

  

	9.	Subject to paragraph 10, an approval by the Authority pursuant to paragraph 1(a) may be granted subject to such conditions as the Authority considers appropriate, having regard, in
particular, to: 

  

	 	(a)	the need for any further action to be undertaken by the licensee to ensure that the use of system charging methodology would facilitate the achievement of the relevant objectives;
and 

  

 48 

	 	(b)	the time by which such action must be completed. 

  

	10.	An approval granted under paragraph 9 will only be effective if the Authority has informed the licensee of its intention to impose such conditions in a notice which:

  

	 	(a)	sets out the nature and contents of the conditions; and 

  

	 	(b)	specifies the period (not being less than 28 days from the date of the notice) within which representations with respect to the conditions may be made, 

 and has considered any representations or objections which have been duly made by the licensee and have not been withdrawn. 
  

	11.	The provisions of this condition are wholly without prejudice to: 

  

	 	(a)	the application of any charge restriction conditions (within the meaning given in paragraph 4 of special condition A1 (Definitions and Interpretations) of the distribution licence;
or 

  

	 	(b)	the application of any charging arrangements condition (within the meaning of standard condition BA1 (Charging Arrangements) of the distribution licence as modified from time to
time). 

  

	12.	The Authority may (following consultation with the licensee and, where appropriate, with any other authorised electricity operator likely to be materially affected thereby) issue
directions relieving the licensee of its obligations under paragraph 1 to such extent as may be specified in the directions. 

  

 49 

 Condition 4A. Charges for Use of System 
  

	1.	The licensee shall prepare a statement, in a form approved by the Authority, which sets out the basis on which charges will be made for use of system (“the charging
statement”), which: 

  

	 	(a)	is in such form and contains such detail as would enable any person to make a reasonable estimate of the charges to which he would become liable in respect of use of system; and

  

	 	(b)	from 1 April 2005, is prepared in accordance with the use of system charging methodology. 

  

	2.	The statement referred to at paragraph 1 shall include: 

  

	 	(a)	a schedule of charges for the distribution of electricity under use of system; 

  

	 	(b)	a schedule of adjustment factors to be made for distribution losses, in the form of additional supplies required to cover those losses; 

  

	 	(c)	a schedule of the charges (if any) which may be made in respect of accounting and administrative services; 

  

	 	(d)	a schedule of the charges (if any) which may be made for the provision and installation of any electrical plant at entry or exit points, the provision and installation of which are
ancillary to the grant of use of system, and for the maintenance of such electrical plant; 

  

	 	(e)	information on electricity distribution use of system rebates (if any) given or announced to authorised electricity operators in the 12 months preceding the date of publication or
revision of the statement; and 

  

	 	(f)	up until 31 March 2005, the principles on which and the methods by which charges will be made for use of system. 

  

 50 

	3.	Without prejudice to paragraph 6, before making any amendment to its use of system charges, the licensee shall give the Authority a revised charging statement which sets out the
amended charges and specifies the date from which they are to have effect. 

  

	4.	Without prejudice to paragraph 4 of standard condition 4 (Use of System Charging Methodology) and paragraph 6 of this condition, before any modification of the use of system
charging methodology comes into effect, the licensee shall give the Authority a revised charging statement which sets out the amended charges and specifies the date from which they are to have effect. 

  

	5.	The licensee shall, not less than three months before the date on which it proposes to amend its use of system charges in respect of any agreement for use of system:

  

	 	(a)	send to the Authority a notice setting out those proposals, together with an explanation of them (including a statement of any assumptions on which the proposals are based); and

  

	 	(b)	send a copy of such notice to any person who has entered into an agreement for use of system in accordance with the provisions of this licence. 

  

	6.	Except with the prior consent of the Authority, the licensee shall not amend its use of system charges in respect of any agreement for use of system unless:

  

	 	(a)	the licensee has given prior notice of the amendment in accordance with paragraph 5; and 

  

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	 	(b)	the amendment reflects the proposals made in the notice (subject only to revisions consequent on material changes in the matters which were expressed, in the statement under
paragraph 5 which accompanied the notice, to be assumptions on which the proposals were based). 

  

	7.	The licensee: 

  

	 	(a)	may periodically review the information set out in and, with the approval of the Authority, change the form of the charging statement; and 

  

	 	(b)	shall, at least once in every year, make such changes (if any) as are necessary to the charging statement to ensure that the information set out in it continues to be accurate in
all material respects. 

  

	8.	The licensee shall give or send a copy of any statement (or the most recent revision thereof) prepared in accordance with paragraph 1 to any person who requests it.

  

	9.	The licensee may make a charge for any statement given or sent pursuant to paragraph 8 of an amount which does not exceed the amount specified in directions issued by the Authority
for the purposes of this condition based on the Authority’s estimate of the licensee’s reasonable costs of providing the statement. 

  

	10.	Unless the Authority determines otherwise, the licensee shall not enter into any use of system arrangement which does not ensure that its use of system charges will comply with the
charging statement (or, where applicable, with the revision of that statement which is most recent at that time) at each time at which charges fall to be made under the arrangement. 

  

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	11.	Nothing in this condition affects the ability of the licensee to charge for use of system in accordance with the charging statement (or the most recent revision thereof) issued in
accordance with paragraph 1. 

  

	12.	The Authority may (following consultation with the licensee and, where appropriate, with any other authorised electricity operator likely to be materially affected thereby) issue
directions relieving the licensee of its obligations under paragraph 1 to such extent as may be specified in the directions. 

  

 53 

 Condition 4B. Connection Charging Methodology 
  

	1.	The licensee shall, by 1 April 2005: 

  

	 	(a)	determine a connection charging methodology approved by the Authority; and 

  

	 	(b)	comply with the connection charging methodology at that date and as modified from time to time thereafter in accordance with the provisions of this condition.

  

	2.	The licensee shall, for the purpose of ensuring that the connection charging methodology continues to achieve the relevant objectives: 

  

	 	(a)	review the connection charging methodology at least once in every year; and 

  

	 	(b)	subject to paragraph 10, make such modifications (if any) of the connection charging methodology as are necessary for the purpose of better achieving the relevant objectives.

  

	3.	In paragraph 2 and below, the relevant objectives are: 

  

	 	(a)	that compliance with the connection charging methodology facilitates the discharge by the licensee of the obligations imposed on it under the Act and by this licence;

  

	 	(b)	that compliance with the connection charging methodology facilitates competition in the generation and supply of electricity, and does not restrict, distort, or prevent competition
in the transmission or distribution of electricity; 

  

 54 

	 	(c)	that compliance with the connection charging methodology results in charges which reflect, as far as is reasonably practicable (taking account of implementation costs), the costs
incurred by the licensee in its distribution business; and 

  

	 	(d)	that, so far as is consistent with sub-paragraphs (a), (b) and (c), the connection charging methodology, as far as is reasonably practicable, properly takes account of
developments in the licensee’s distribution business. 

  

	4.	Subject to paragraph 6, the licensee shall prepare a statement, in a form approved by the Authority, which: 

  

	 	(a)	sets out the basis on which charges will be made for the provision of connections to the licensee’s distribution system; and 

  

	 	(b)	is in such form and contains such detail as are necessary to enable any person to make a reasonable estimate of the charges to which he would become liable in respect of such
provision. 

  

	5.	The statement referred to at paragraph 4 shall include: 

  

	 	(a)	a schedule listing those items (including the carrying out of works and the provision and installation of electric lines or electrical plant) of significant cost liable to be
required for the purpose of connection (at entry or exit points) to the licensee’s distribution system for which connection charges may be made or levied and including (where practicable) indicative charges for each such item and (in other
cases) an explanation of the principles on which and the methods by which such charges will be calculated; 

  

	 	(b)	the principles on which and the methods by which any charges will be made in respect of extension or reinforcement of the licensee’s distribution system rendered (in the
licensee’s discretion) necessary or appropriate by virtue of providing connection to or use of system to any person seeking connection; 

  

 55 

	 	(c)	the principles on which and the methods by which connection charges will be made in circumstances where the electric lines or electrical plant to be installed are (at the
licensee’s discretion) of greater size or capacity than that required for use of system by the person seeking connection; 

  

	 	(d)	(save to the extent that such matters are included in any agreement offered in accordance with standard condition 36B - Requirement to Offer Terms for the Provision of Distributor
Metering and Data Services), the principles on which and the methods by which any charges will be made for the provision of special metering or telemetry or data processing equipment by the licensee for the purposes of enabling any person who is
party to the Balancing and Settlement Code and/or the Settlement Agreement for Scotland to comply with his obligations thereunder in respect of metering or the performance by the licensee of any service in relation to such metering;

  

	 	(e)	the principles on which and the methods by which any charges will be made for disconnection from the licensee’s distribution system and the removal of electrical plant and
electric lines following disconnection; and 

  

	 	(f)	the principles on which and the methods by which any charges (including any capitalised charge) will be made for maintenance, repair, and replacement required of electric lines or
electrical plant provided and installed for making a connection to the licensee’s distribution system. 

  

	6.	With effect from 1 April 2005, the statement prepared by the licensee in accordance with paragraph 4 shall: 

  

	 	(a)	comply with the connection charging methodology; and 

  

 56 

	 	(b)	be approved by the Authority, except in the case of the indicative charges included within the statement by virtue of paragraph 5(a), which will be in a form approved by the
Authority. 

  

	7.	Connection charges for those items referred to at paragraph 5 will be set at a level which will enable the licensee to recover: 

  

	 	(a)	the appropriate proportion to be determined (having regard to the factors set out at paragraph 8) of the costs directly or indirectly incurred in carrying out any works, the
extension or reinforcement of the licensee’s distribution system, or the provision and installation, maintenance, repair, and replacement, or (as the case may be) removal following disconnection, of any electric lines or electrical plant; and

  

	 	(b)	a reasonable rate of return on the capital represented by such costs. 

  

	8.	For the purpose of determining an appropriate proportion of the costs directly or indirectly incurred in carrying out works under an agreement for providing a connection, or a
modification or retention of an existing connection, the licensee shall have regard to: 

  

	 	(a)	the benefit (if any) to be obtained or likely in the future to be obtained by the licensee or any other person as a result of the carrying out of such works by reason of extension
of the licensee’s distribution system or the provision of additional entry or exit points on such system or otherwise; 

  

	 	(b)	the ability or likely future ability of the licensee to recoup a proportion of such costs from third parties; and 

  

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	 	(c)	the principles (subject to paragraph 9) that: 

  

	 	(i)	charges will not generally take into account system reinforcement carried out at more than one voltage level above the voltage of connection; 

  

	 	(ii)	charges will not generally take into account the costs (including any capitalised charge) for maintenance, repair and replacement required of electric lines or electrical plant
provided and installed for making a connection to the licensee’s distribution system; 

  

	 	(iii)	the licensee may charge at the time of connection an amount for reinforcement of the licensee’s distribution system based on a proportionate share of the costs of such
reinforcement; and 

  

	 	(iv)	connection charges will not cover costs that are covered by use of system charges. 

  

	9.	Until 31 March 2005, paragraph 8(c) applies to the licensee as if, for the provisions set out therein, there were substituted the provisions set out in paragraph 5(c) of
standard condition 4B of this licence in the form in which it was in force at 1 April 2004. 

  

	10.	Except with the consent of the Authority, before making a modification of the connection charging methodology the licensee shall: 

  

	 	(a)	give the Authority a report which sets out: 

  

	 	(i)	the terms proposed for the modification; 

  

	 	(ii)	how the intended modification would better achieve the relevant objectives; and 

  

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	 	(iii)	a timetable for implementing the modification and the date with effect from which the modification (if made) is to take effect, being not earlier than the date on which the period
referred to in paragraph 12 will expire; and 

  

	 	(b)	where the Authority has directed that sub-paragraph (a) should not apply, comply with such other requirements (if any) as the Authority may specify in its direction.

  

	11.	Subject to paragraph 12, where the licensee has complied with the requirements of paragraph 10, it shall, before making the modification: 

  

	 	(a)	revise the statement (or the most recent revision thereof) issued under paragraph 4 so that the statement sets out the changed connection charging methodology and specifies the date
from which it is to have effect; and 

  

	 	(b)	give the Authority a copy of the revised statement. 

  

	12.	The licensee shall make the modification to the connection charging methodology unless, within 28 days of receiving the licensee’s report under paragraph 10, the Authority,
having particular regard to the relevant objectives, has either: 

  

	 	(a)	directed the licensee not to make the modification; or 

  

	 	(b)	notified the licensee that it intends to consult and then within three months of that notification directed the licensee not to make the modification. 

  

	13.	The licensee shall give or send a copy of any statement under paragraph 4 or report under paragraph 10 to any person who requests it. 

  

 59 

	14.	The licensee may make a charge for any statement or report given or sent pursuant to paragraph 13 of an amount which does not exceed the amount specified in directions issued by the
Authority for the purposes of this condition based on the Authority’s estimate of the licensee’s reasonable costs of providing the document. 

  

	15.	If so requested, and subject to paragraphs 17 and 18, the licensee shall, as soon as practicable and in any event within 28 days (or, where the Authority so approves, such longer
period as the licensee may reasonably require having regard to the nature and complexity of the request) after the date referred to in paragraph 16, give or send to any person making such request a statement showing present and future circuit
capacity, forecast power flows and loading on the part or parts of the licensee’s distribution system specified in the request and fault levels for each distribution node covered by the request, and containing: 

  

	 	(a)	such further information as is reasonably necessary to enable such person to identify and evaluate the opportunities available when connecting to and making use of the part or parts
of the licensee’s distribution system specified in the request; and 

  

	 	(b)	if so requested, a commentary prepared by the licensee indicating its views on the suitability of the part or parts of the licensee’s distribution system specified in the
request for new connections and the distribution of further quantities of electricity. 

  

	16.	For the purposes of paragraph 15, the date referred to is the later of: 

  

	 	(a)	the date of receipt of the request referred to in paragraph 15; or 

  

	 	(b)	the date on which the licensee receives agreement from the person making the request to pay the amount estimated by the licensee or (as the case may be) such other amount as is
determined by the Authority under paragraph 17. 

  

 60 

	17.	The licensee may within ten days after receipt of the request provide an estimate of its reasonable costs in the preparation of any statement referred to in paragraph 15, and its
obligation to provide such statement will be conditional on the requesting person agreeing to pay the amount estimated or such other amount as the Authority may, on the application of the licensee or the person requesting such statement, direct.

  

	18.	The licensee shall include in every statement given or sent under paragraph 15 the information required by that paragraph, except that the licensee may: 

  

	 	(a)	with the prior consent of the Authority omit from any such statement any details as to circuit capacity, power flows, loading or other information, the disclosure of which would, in
the view of the Authority, seriously and prejudicially affect the commercial interests of the licensee or any third party; and 

  

	 	(b)	omit information the disclosure of which would place the licensee in breach of standard condition 39 (Restriction on Use of Certain Information and Independence of the Distribution
Business) (if applicable). 

  

	19.	Subject to paragraph 20, approvals by the Authority pursuant to paragraphs 1(a) and 6 may be granted subject to such conditions as the Authority considers appropriate, having
regard, in particular, to: 

  

	 	(a)	the need for any further action to be undertaken by the licensee to ensure that the connection charging methodology would facilitate the achievement of the relevant objectives; and

  

	 	(b)	the time by which such action must be completed. 

  

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	20.	An approval granted under paragraph 19 will only be effective if the Authority has informed the licensee of its intention to impose such conditions in a notice which:

  

	 	(a)	sets out the nature and contents of the conditions; and 

  

	 	(b)	specifies the period (not being less than 28 days from the date of the notice) within which representations with respect to the conditions may be made, 

 and has considered any representations or objections which have been duly made by the licensee and have not been withdrawn. 
  

	21.	Unless the Authority determines otherwise, the licensee shall not enter into an arrangement for providing a connection or a modification or retention of an existing connection
unless the arrangement ensures that the connection charges in respect of that arrangement will comply with the statement referred to in paragraph 4 at the time at which the licensee offers to enter into the arrangement. 

  

	22.	Nothing in this condition affects the ability of the licensee to charge for the provisions of connections in accordance with the statement issued pursuant to paragraph 4.

  

	23.	The provisions of this condition are wholly without prejudice to: 

  

	 	(a)	the application of any charge restriction conditions (within the meaning given in paragraph 4 of special condition A1 (Definitions and Interpretations) of the distribution licence;
or 

  

	 	(b)	the application of any charging arrangements condition (within the meaning of standard condition BA1 (Charging Arrangements) of the distribution licence as modified from time to
time). 

  

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	24.	The Authority may (following consultation with the licensee and, where appropriate, with any other authorised electricity operator likely to be materially affected thereby) issue
directions relieving the licensee of its obligations under paragraph 1 to such extent as may be specified in the directions. 

  

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 Condition 4C. Non-Discrimination in the Provision of Use of System and Connection to the System 
  

	1.	The licensee shall not discriminate between any persons or class or classes of person: 

  

	 	(a)	In providing use of system; 

  

	 	(b)	In carrying out works for the purpose of connection to the licensee’s distribution system; or 

  

	 	(c)	In providing for a modification to or the retention of an existing connection to that system. 

  

	2.	The licensee, in the provision of non-contestable connection services and information relating thereto, shall not discriminate between: 

  

	 	(a)	any business of the licensee comprising the provision of connections to the licensee’s distribution system; 

  

	 	(b)	any business of any affiliate or related undertaking of the licensee comprising such provision; and 

  

	 	(c)	any business of any other person comprising such provision. 

  

	3.	The licensee shall provide information to the Authority regarding compliance with paragraph 2 in a format determined by the Authority which may be amended from time to time,
following consultation with the licensee. 

  

	4.	The information in the format determined pursuant to paragraph 3 shall be provided: 

  

	 	(a)	every year on or before such date as may be specified by the Authority, following consultation with the licensee; and 

  

 64 

	 	(b)	on any other such date as may be requested by the Authority. 

  

	5.	Without prejudice to paragraph 1, and subject to the provisions of standard condition 4A (Charges for Use of System), the licensee shall not make charges for providing use of system
to any person or class or classes of persons which differ from the charges for such provision to any other person or any other class or classes of persons, except insofar as such differences reasonably reflect differences in the costs associated
with such provision. 

  

	6.	In setting its charges for connection or use of system, and in the provision of non-contestable connection services and information relating thereto, the licensee shall not
restrict, distort, or prevent competition in the generation, transmission, distribution, or supply of electricity. 

  

	7.	In this condition 

  

			
	“non-contestable connection services”	  	means those services which, in accordance with the statement prepared by the licensee pursuant to standard condition 4B (Connection Charging Methodology), cannot be provided by a person other
than the licensee.
		
	“information relating thereto”	  	means such information about those services as is necessary to facilitate the purpose for which the information is required by the person requesting it.

  

 65 

 Condition 4D. Requirement to Offer Terms for Use of System and Connection 
  

	1.	On application made by any person, the licensee shall (subject to paragraph 4) offer to enter into an agreement for use of system: 

  

	 	(a)	to accept into the licensee’s distribution system, at such entry point or points and in such quantities as may be specified in the application, electricity to be provided by or
on behalf of such person; and/or 

  

	 	(b)	to distribute such quantities of electricity as are referred to in sub-paragraph (a) (less any distribution losses) at such exit point or points on the licensee’s
distribution system and to such person or persons as the applicant for use of system may specify. 

  

	2.	On application made by any person for a connection, the licensee shall offer terms for making the connection pursuant to sections 16 and 16A of the Act and in compliance with the
provisions of this condition. 

  

	3.	Where the licensee makes an offer to enter into a connection agreement pursuant to section 22 of the Act, or replies to a request for a connection made to it under section 16A of
the Act, the licensee shall, in making the offer or replying to the applicant, make detailed provision regarding: 

  

 66 

	 	(a)	the carrying out of the works (if any) required to connect the licensee’s distribution system to any other system for the transmission or distribution of electricity, and for
the obtaining of any consents necessary for such purpose; 

  

	 	(b)	the carrying out of the works (if any) in connection with the extension or reinforcement of the licensee’s distribution system rendered (in the licensee’s discretion)
appropriate or necessary by reason of making the connection or the modification of an existing connection, and for the obtaining of any consents necessary for such purpose; 

  

	 	(c)	(save to the extent that such matters are included in any agreement offered in accordance with standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering
Services) or standard condition 36A (Requirement to Offer Terms for the Provision of Data Services)), the installation of appropriate meters (if any) required to enable the licensee to measure electricity being accepted into the licensee’s
distribution system at the specified entry point or points or leaving such system at the specified exit point or points; 

  

	 	(d)	the installation of such switchgear or other apparatus (if any) as may be required for the interruption of supply where the person seeking connection or the modification of an
existing connection does not require the provision of top-up or standby; and 

  

	 	(e)	(save to the extent that such matters are included in any agreement offered in accordance with standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering
Services) or standard condition 36A (Requirement to Offer Terms for the Provision of Data Services)), the installation of special metering, telemetry, or data processing equipment (if any) for the purpose of enabling any party to the Balancing and
Settlement Code and/or the Settlement Agreement for Scotland to comply with its obligations thereunder in respect of metering or the performance by the licensee of any service in relation to such metering. 

  

 67 

	4.	In making an offer pursuant to this condition to enter into any connection agreement, or in replying to a request for connection under section 16A of the Act, the licensee shall set
out: 

  

	 	(a)	the date by which, in the case of an agreement under paragraph 2, any works required to permit access to the licensee’s distribution system (including for this purpose any
works to reinforce or extend the licensee’s distribution system) shall be completed, time being of the essence unless, in the case of connection agreements only, otherwise agreed between the parties; 

  

	 	(b)	the charges to be paid in respect of the services required, which are (unless manifestly inappropriate): 

  

	 	(i)	to be set in compliance with the requirements of standard condition 4B (Connection Charging Methodology), and 

  

	 	(ii)	to be presented in such a way as to be referable to the statement prepared in accordance with paragraph 4 of standard condition 4B (Connection Charging Methodology) or any revision
thereof; and 

  

	 	(c)	such other detailed terms in respect of each of the services required as are or may be appropriate for the purpose of the agreement. 

  

	5.	The licensee shall offer terms for agreements in accordance with paragraphs 1, 2, and 4 as soon as is practicable and (save where the Authority consents to a longer period) in any
event not more than the period specified in paragraph 6 after receipt by the licensee (or its agent) from any person of an application containing all such information as the licensee may reasonably require for the purpose of formulating the terms of
the offer. 

  

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	6.	For the purposes of paragraph 5, the period specified is: 

  

	 	(a)	in the case of persons seeking the provision of use of system only, 28 days; 

  

	 	(b)	in the case of persons seeking connection or the modification of an existing connection, three months; and 

  

	 	(c)	in the case of persons seeking use of system in conjunction with connection or the modification of an existing connection, three months. 

  

	7.	The licensee is not obliged pursuant to this condition to offer to enter or to enter into any agreement under paragraphs 1, 2, and 4: 

  

	 	(a)	if to do so would be likely to involve the licensee being: 

  

	 	(i)	in breach of its duties under section 9 of the Act, 

  

	 	(ii)	in breach of any regulations made under section 29 of the Act or of any other enactment relating to safety or standards applicable in respect of the distribution business,

  

	 	(iii)	in breach of the Grid Code or the licensee’s Distribution Code, or 

  

	 	(iv)	in breach of the conditions; or 

  

 69 

	 	(b)	if the person making the application does not undertake to be bound, insofar as applicable, by the terms of the licensee’s Distribution Code or the Grid Code from time to time
in force; or 

  

	 	(c)	if to do so would be likely to involve the licensee doing something which, without the consent of another person, would require the exercise of a power conferred by any provision of
Schedules 3 or 4 to the Act, and the licence does not provide for that provision to have effect in relation to the licensee, and any necessary consent has not, at the time that the request is made, been given. 

  

	8.	The licensee shall, within 28 days following receipt of a request from any person, give or send to him such information in the possession of the licensee as may be reasonably
required by such person for the purpose of completing an application under the Application Regulations 

  

 70 

 Condition 4E. Functions of the Authority 
  

	1.	If, after a period which appears to the Authority to be reasonable for the purpose, the licensee has failed to enter into an agreement with any person entitled or claiming to be
entitled thereto pursuant to a request under standard condition 4D (Requirement to Offer Terms for Use of System and Connection), the Authority may, on the application of such person or the licensee, settle any terms of the agreement in dispute
between the licensee and that person in such manner as appears to the Authority to be reasonable, having (insofar as is relevant) regard in particular to the following considerations: 

  

	 	(a)	that such a person should pay to the licensee: 

  

	 	(i)	in the case of provision of use of system, the use of system charges determined in accordance with standard condition 4A (Charges for Use of System), and 

 

	 	(ii)	in the case of provision of a connection, connection charges determined in accordance with standard condition 4B (Connection Charging Methodology); 

  

	 	(b)	that the performance by the licensee of its obligations under the agreement should not cause it to be in breach of those provisions referred to at paragraph 7 of standard condition
4D (Requirement to Offer Terms for Use of System and Connection); 

  

	 	(c)	that any methods by which the licensee’s distribution system is connected to any other system for the transmission or distribution of electricity accord (insofar as applicable
to the licensee) with the applicable Distribution Codes and Grid Code; and 

  

	 	(d)	that the terms and conditions of the agreement so settled by the Authority and of any other agreements entered into by the licensee pursuant to a request under standard condition 4D
(Requirement to Offer Terms for Use of System and Connection) should be in as similar a form as is practicable. 

  

 71 

	2.	Insofar as any person entitled or claiming to be entitled to an offer under standard condition 4D (Requirement to Offer Terms for Use of System and Connection) wishes to proceed on
the basis of an agreement as settled by the Authority pursuant to paragraph 1, the licensee shall forthwith enter into and implement such agreement in accordance with its terms. 

  

	3.	If either party to such agreement proposes to vary the contractual terms of any agreement for use of system, or for the provision of a connection or the modification of an existing
connection to the licensee’s distribution system, entered into pursuant to standard condition 4D (Requirement to Offer Terms for Use of System and Connection) or under this condition, in any manner provided for under such agreement, the
Authority may, at the request of that party, settle any dispute relating to such variation in such manner as appears to the Authority to be reasonable. 

  

	4.	If the licensee and an authorised electricity operator or other person who is party to a relevant agreement are in dispute as to whether: 

  

	 	(a)	use of system charges made, or to be made, comply with the statement of use of system charges under paragraph 1 of standard condition 4A (Charges for Use of System) which applied or
applies in relation to the period in respect of which the dispute arises; or 

  

	 	(b)	use of system charges made, or to be made, comply with the statement of the use of system charging methodology under paragraph 1(a) of standard condition 4 (Use of System Charging
Methodology) which applied or applies in relation to the period in respect of which the dispute arises; or 

  

 72 

	 	(c)	connection charges made, or to be made, comply with the statement of the connection charging methodology under paragraph 4 of standard condition 4B (Connection Charging Methodology)
which applied or applies in relation to the period in respect of which the dispute arises, 

 such dispute may be referred to
the Authority for it to determine whether, in the case of sub-paragraph (a), the charges made, or to be made, complied with the relevant statement under standard condition 4A (Charges for Use of System), or whether, in the case of sub-paragraphs
(b) and (c), the charges complied with the relevant methodology. 
  

 73 

 Condition 5. Distribution System Planning Standard and Quality of Service 
  

	1.	The licensee shall plan and develop the licensee’s distribution system in accordance with a standard not less than that set out in Engineering Recommendation P.2/5 (October
1978 revision) of the Electricity Council Chief Engineers’ Conference in so far as applicable to it or such other standard of planning as the licensee may, following consultation (where appropriate) with the system operator and any other
authorised electricity operator liable to be materially affected thereby and with the approval of the Authority, adopt from time to time. 

  

	2.	The licensee shall within 3 months after this condition comes into force draw up and submit to the Authority for its approval a statement setting out criteria by which the quality
of performance of the licensee in maintaining the licensee’s distribution system’s security and availability and quality of service may be measured. 

  

	3.	The licensee shall within 2 months after the end of each financial year submit to the Authority a report providing details of the performance of the licensee during the previous
financial year against the criteria referred to in paragraphs 1 and 2. 

  

	4.	The Authority may (following consultation with the licensee and, where appropriate, with the system operator and any other authorised electricity operator liable to be materially
affected thereby) issue directions relieving the licensee of its obligation under paragraph 1 in respect of such parts of the licensee’s distribution system and to such extent as may be specified in the directions. 

  

	5.	Paragraph 2 shall not apply to the licensee in respect of any period during which standard condition 49 has effect. 

  

	6.	Paragraph 3 shall not apply in respect of a previous financial year during the whole or part of which standard condition 49 had effect. 

  

 74 

 Condition 6. Safety and Security of Supplies Enquiry Service 
  

	1.	The licensee shall establish, or procure the establishment of, and subsequently operate and maintain, or procure the subsequent operation and maintenance of, an enquiry service for
use by any person for the purposes of receiving reports and offering information, guidance or advice about any matter or incident which: 

  

	 	(a)	affects or is likely to affect the maintenance of the security, availability and quality of service of the licensee’s distribution system; or 

  

	 	(b)	arises from or in connection with the operation of, or otherwise relates to, the licensee’s distribution system and which causes danger or requires urgent attention or is
likely to cause danger or require urgent attention. 

  

	2.	The service established, operated and maintained in accordance with paragraph 1 shall: 

  

	 	(a)	be provided without charge by the licensee to the user at the point of use; 

  

	 	(b)	ensure that all reports and enquiries are processed in a prompt and efficient manner whether made by telephone, in writing or in person; and 

  

	 	(c)	be available to receive and process telephone reports and enquiries at all times on every day of each year. 

  

	3.	In the establishment and operation and maintenance of the enquiry service in accordance with paragraph 1 the licensee shall not discriminate between any persons or class or classes
of persons. 

  

	4.	In the establishment, operation and maintenance of the enquiry service in accordance with paragraph 1 the licensee shall not restrict, distort or prevent competition in the supply
of electricity. 

  

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	5.	The licensee shall have in force at all times a statement approved by the Authority setting out details of the service to be provided in accordance with paragraph 1, and the
licensee shall give or send a copy of such statement to any person requesting it. 

  

	6.	The licensee shall give to the Authority notice of any amendments it proposes to make to the statement prepared under paragraph 5, and shall not make such amendments until either:

  

	 	(a)	a period of one month from the date of the notice has expired; or 

  

	 	(b)	prior to the expiry of such period, the licensee has obtained the written approval of the Authority to such amendments. 

  

	7.	The licensee shall take steps to inform each authorised electricity operator which uses the service of any change to the address or telephone number of such service established,
operated and maintained in accordance with paragraph 1, as soon as is practicable but in any event prior to such change becoming effective. 

  

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 Condition 7. Provision of Information about Theft or Abstraction of Electricity, Damage and Meter Interference

  

	1.	Where a person other than the licensee is the owner of any electrical plant, electric lines or meter the licensee shall, as soon as is reasonably practicable, inform that person of
any incident where the licensee has reason to believe: 

  

	 	(a)	that there has been damage to such electrical plant, electric line or metering equipment; or 

  

	 	(b)	that there has been interference with the metering equipment to alter its register or prevent it from duly registering the quantity of electricity supplied;

 provided that the licensee shall not be obliged to inform the owner of any electrical plant, electrical line or meter of any
such incident where it has reason to believe that the damage or interference referred to above was caused by such owner. 
  

	2.	Where the licensee, in the course of providing services to any person supplying electricity to premises directly connected to the licensee’s distribution system, has reason to
believe that: 

  

	 	(a)	there has been damage to any electrical plant, electric line or metering equipment through which such premises are supplied with electricity; or 

  

	 	(b)	there has been interference with the metering equipment through which such premises are supplied to alter its register or prevent it from duly registering the quantity of
electricity supplied, 

 the licensee shall, as soon as reasonably practicable, inform that person (the person supplying
electricity to the premises in question) of the incident in question. 
  

 77 

 Condition 8. Provisions Relating to the Connection of Metering Equipment 
  

	1.	On application made by any person the licensee shall, subject to paragraph 5, offer to enter into an agreement authorising that person to connect metering equipment to the
licensee’s distribution system. 

  

	2.	In making an offer to enter into an agreement specified in paragraph 1, the licensee shall set out: 

  

	 	(a)	the date from which the applicant is authorised to undertake connections; 

  

	 	(b)	the procedures to be adopted by the applicant when making connections, with particular regard to those relating to safety; and 

  

	 	(c)	such other detailed terms as are or may be appropriate for the purposes of the agreement. 

  

	3.	The licensee shall offer terms for an agreement in accordance with paragraph 1 as soon as practicable and (save where the Authority consents to a longer period) in any event not
more than 28 days after receipt by the licensee from any person of an application containing all such information as the licensee may reasonably require for the purpose of formulating the terms of the offer. 

  

	4.	In the offering of the terms in accordance with paragraph 1, the licensee shall not show undue preference to or exercise undue discrimination against any person or class or classes
of persons and shall not offer terms or operate in such a way as to restrict, distort or prevent competition. 

  

	5.	The licensee shall not be obliged pursuant to this condition to offer to enter or to enter into any agreement where to do so would be likely to cause the licensee to be in breach of
those provisions referred to at paragraph 7(a) of standard condition 4B (Requirement to Offer Terms for Use of System and Connection). 

  

 78 

	6.	If, after a period which appears to the Authority to be reasonable for the purpose, the licensee has failed to enter into an agreement with any person entitled or claiming to be
entitled thereto pursuant to a request under this condition, the Authority may, on the application of such person or the licensee, settle any terms of the agreement in dispute between the licensee and that person in such manner as appears to the
Authority to be reasonable. 

  

	7.	If the licensee or other party to such agreement proposes to vary the terms of any agreement entered into pursuant to this condition in any manner provided for under such agreement,
the Authority may, at the request of the licensee or other party to such agreement, settle any dispute relating to such variation in such manner as appears to the Authority to be reasonable. 

  

	8.	In so far as any person entitled or claiming to be entitled to an offer under this condition wishes to proceed on the basis of an agreement or a variation to it as settled by the
Authority pursuant to paragraphs 6 and 7, the licensee shall forthwith enter into and implement such agreement or variation in accordance with its terms. 

  

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 Condition 9. Distribution Code 
  

	1.	The licensee shall in consultation with authorised electricity operators liable to be materially affected thereby prepare and at all times have in force and shall implement and
(subject to paragraph 10 of this condition) comply with a Distribution Code: 

  

	 	(a)	covering all material technical aspects relating to connections to and the operation and use of the licensee’s distribution system or (in so far as relevant to the operation
and use of the licensee’s distribution system) the operation of electric lines and electrical plant connected to the licensee’s distribution system and (without prejudice to the foregoing) making express provision as to the matters
referred to in paragraph 5 below; and 

  

	 	(b)	which is designed so as: 

  

	 	(i)	to permit the development, maintenance and operation of an efficient, co-ordinated and economical system for the distribution of electricity; and 

  

	 	(ii)	to facilitate competition in the generation and supply of electricity. 

  

	2.	The Distribution Code in force at the date this condition comes into force shall be sent to the Authority for its approval. Thereafter the licensee shall (in consultation with
authorised electricity operators liable to be materially affected thereby) periodically review (including upon the request of the Authority) the Distribution Code and its implementation. Following any such review, the licensee shall send to the
Authority: 

  

	 	(a)	a report on the outcome of such review; and 

  

	 	(b)	any proposed revisions to the Distribution Code from time to time as the licensee (having regard to the outcome of such review) reasonably thinks fit for the achievement of the
objectives referred to in sub-paragraph 1(b); and 

  

	 	(c)	any written representations or objections from authorised electricity operators (including any proposals by such operators for revisions to the Distribution Code not accepted by the
licensee in the course of the review) arising during the consultation process and subsequently maintained. 

  

 80 

	3.	Revisions to the Distribution Code proposed by the licensee and sent to the Authority pursuant to paragraph 2 must receive the prior approval of the Authority before being
implemented. 

  

	4.	Having regard to any written representations or objections referred to in sub-paragraph 2(c), and following such further consultation (if any) as the Authority may consider
appropriate, the Authority may issue directions requiring the licensee to revise the Distribution Code in such manner as may be specified in the directions, and the licensee shall forthwith comply with any such directions. 

 

	5.	The Distribution Code shall include: 

  

	 	(a)	a distribution planning and connection code containing: 

  

	 	(i)	connection conditions specifying the technical, design and operational criteria to be complied with by any person connected or seeking connection to the licensee’s distribution
system; and 

  

	 	(ii)	planning conditions specifying the technical and design criteria and procedures to be applied by the licensee in the planning and development of the licensee’s distribution
system and to be taken into account by persons connected or seeking connection with the licensee’s distribution system in the planning and development of their own plant and systems; and 

  

	 	(b)	a distribution operating code specifying the conditions under which the licensee shall operate the licensee’s distribution system and under which persons shall operate their
plant and/or distribution systems in relation to the licensee’s distribution system, in so far as necessary to protect the security and quality of supply and safe operation of the licensee’s distribution system under both normal and
abnormal operating conditions. 

  

	6.	The licensee shall give or send a copy of the Distribution Code (as from time to time revised) to the Authority. 

  

	7.	The licensee shall (subject to paragraph 8) give or send a copy of the Distribution Code (as from time to time revised) to any person requesting the same. 

 

 81 

	8.	The licensee may make a charge for any copy of the Distribution Code (as from time to time revised) given or sent pursuant to paragraph 7 of an amount which will not exceed any
amount specified for the time being for the purposes of this condition in directions issued by the Authority. 

  

	9.	In preparing, implementing and complying with the Distribution Code (including in respect of the scheduling of maintenance of the licensee’s distribution system), the licensee
shall not unduly discriminate between or unduly prefer any person or class or classes of persons. 

  

	10.	The Authority may (following consultation with the licensee) issue directions relieving the licensee of its obligations under the Distribution Code in respect of such parts of the
licensee’s distribution system and to such extent as may be specified in the directions. 

  

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 Condition 9A. Compliance with other Distribution Codes 
  

	1.	The licensee shall comply with the provisions of the other Distribution Codes insofar as applicable to the licensee or the licensee’s distribution business.

  

	2.	The Authority may, following consultation with the licensed distributor(s) responsible for any other Distribution Code(s) and any authorised electricity operators directly affected
thereby, issue directions relieving the licensee of its obligation in paragraph 1 in respect of such parts of the other Distribution Code(s) and to such extent and subject to such conditions as may be specified in those directions.

  

 83 

 Condition 9B: Distribution Connection and Use of System Agreement 
 Part A: This licence condition 
  

	1.	The licensee shall within six months of the coming into effect of this condition or such later date as the Authority may direct, in conjunction with every other relevant electricity
distributor and any other interested authorised electricity operator (not being a relevant electricity distributor), prepare and give effect to a Distribution Connection and Use of System Agreement (a “DCUSA”), which shall comply with the
requirements of this Condition 9B and in particular but without limitation shall: 

  

	 	(a)	include the contents referred to at paragraphs 5 to 7; and 

  

	 	(b)	make provision for the matters set out at paragraph 8 in respect of governance and administration and for the other matters set out at paragraph 15. 

  

	2.	Where the Authority is satisfied with the DCUSA prepared by the licensee in accordance with paragraph 1 above, it shall, by direction, designate the DCUSA for the purposes of this
condition generally. 

  

	3.	Before issuing a direction under paragraph 2, the Authority shall give notice to all relevant electricity distributors, and to such other authorised electricity operators (not being
relevant electricity distributors) as are likely in its opinion to be affected by the DCUSA:  

  

	 	(a)	stating that it intends to designate the DCUSA, 

  

	 	(b)	setting out the contents of the DCUSA and the date on which it is proposed that the direction should take effect, and 

  

	 	(c)	specifying the period (not being less than 28 days from the date of the notice) within which representations with respect to any aspect of those contents may be made.

  

	4.	Subject to the Authority issuing a direction under paragraph 2 above and provided that such direction has not been withdrawn, the licensee shall: 

  

	 	(a)	accede to the DCUSA Accession Agreement on the date on which the Authority’s direction is given under paragraph 2 (the “due date”); 

  

 84 

	 	(b)	maintain the DCUSA; and 

  

	 	(c)	at all times comply with the DCUSA as amended from time to time in accordance with the provisions thereof. 

 Part B: Principal contents of the DCUSA 
  

	5.	The DCUSA shall:  

  

	 	(a)	include such material terms, procedures and arrangements of a commercial nature as relate to the use of the licensee’s distribution system and (where appropriate) to
connections to that system; and 

  

	 	(b)	(without prejudice to the foregoing) make express provision for the matters set out in paragraph 6. 

  

	6.	Those matters are: 

  

	 	(a)	conditions (including as to the provision of credit cover) which are to apply to any person in respect of the commencement, continuation, or termination of use of the
licensee’s distribution system by or on behalf of that person (“the user”), and the obligations owed by the licensee to the user in relation to use of that system; 

  

	 	(b)	terms, arrangements and procedures which are to apply or to be available to the user in respect of the payment of the charges due on either an individual or an aggregated basis to
the licensee from the user for use of the licensee’s distribution system; 

  

	 	(c)	terms, arrangements and procedures which are to apply or to be available to the user in respect of such activities or works (including the energisation, de-energisation, or
re-energisation of entry points and exit points) as may be carried out by or on behalf of the user on the licensee’s distribution system; 

  

 85 

	 	(d)	terms, arrangements and procedures which are to apply or to be available to the user in respect of the activities of system demand control and revenue protection, the installation
and maintenance of metering equipment and the provision of metering data and other relevant information arising from use of the licensee’s distribution system; and 

  

	 	(e)	terms providing for:  

  

	 	(i)	the circumstances in which, in relation to the use of or connection to the licensee’s distribution system, a party’s liability for any contravention of the provisions of
the DCUSA may be restricted; and 

  

	 	(ii)	the extent to which and the circumstances in which such liability will otherwise attach to that party in respect of any claims against it. 

  

	7.	The text of the contents required to be included in the DCUSA at the due date by virtue of this Part B shall, save to the extent directed otherwise by the Authority, be the same as
the text which in each case comprises the corresponding contents of the consolidated agreement for the use of system developed through the joint activities of relevant electricity distributors and users immediately before the due date.

 Part C: Governance and administration 
  

	8.	Without prejudice to the matters set out in Part B, the DCUSA shall also comprise:  

  

	 	(a)	terms for the creation of an agreement, to which the licensee, every other relevant electricity distributor and any other authorised electricity operator (not being a relevant
electricity distributor, and insofar as the DCUSA is applicable to it) shall be a party on such terms and conditions of accession as may be specified (the “DCUSA Accession Agreement”); 

  

 86 

	 	(b)	provisions for the referral for determination by the Authority of any dispute arising as to whether a person seeking to be admitted as a party to the CUSA Accession Agreement has
fulfilled any such accession conditions; 

  

	 	(c)	terms providing for the licensee and such other parties to the DCUSA Accession Agreement as may be specified to be contractually bound by some or all of the provisions of the DCUSA;

  

	 	(d)	arrangements for establishing and maintaining, in accordance with such procedures for appointment or election as may be specified, a panel (the “DCUSA Panel”) which is to
be responsible, by way of such proceedings as may be specified, for the governance and administration of the DCUSA, and whose members are to be required as a condition of appointment or election to act independently and not as delegates;

  

	 	(e)	arrangements for the establishment and funding of a secretariat able to service the DCUSA Panel, to such extent and in respect of such matters as may be specified;

  

	 	(f)	procedures for the amendment, in accordance with Part E, of such provisions of the DCUSA as are specified to be capable of being amended without the prior approval of the Authority;

  

	 	(g)	provisions by virtue of which such parts of the DCUSA as may be specified shall not be capable of being amended without the prior approval of the Authority, and procedures for
seeking such approval; and 

  

	 	(h)	such other matters as may be appropriate to be included in or provided for by the DCUSA, having regard to the requirement of paragraph 9. 

 Part D: The Applicable DCUSA Objectives 
  

	9.	Proposals to amend the DCUSA pursuant to Part E must be such as are calculated to better facilitate achievement of the following objectives (“the Applicable DCUSA
Objectives”): 

  

	 	(a)	the development, maintenance, and operation by the licensee of an efficient, co-ordinated, and economical distribution system; 

  

 87 

	 	(b)	the facilitation of effective competition in the generation and supply of electricity and (so far as consistent therewith) the promotion of such competition in the sale,
distribution and purchase of electricity; 

  

	 	(c)	the efficient discharge by the licensee of the obligations imposed upon it by this licence; and 

  

	 	(d)	the promotion of efficiency in the implementation and administration of the DCUSA arrangements. 

 Part E: Amendment of the DCUSA 
  

	10.	The DCUSA as designated by the Authority in accordance with paragraph 2 may be amended at any time thereafter in accordance with such amendment procedures (including procedures for
amending those amendment procedures themselves) as may be specified and are in conformity with the principles set out in paragraph 11. 

  

	11.	Those principles are that: 

  

	 	(a)	proposals for the amendment of the DCUSA may be made by any relevant electricity distributor, by any other party to the DCUSA Accession Agreement, by the Gas and Electricity
Consumer Council, by the GB System Operator and by such other persons or bodies as may be specified by the Authority; 

  

	 	(b)	the amendment procedures for dealing with any such proposal shall comply with the requirements of paragraph 12; 

  

	 	(c)	the making and implementation of any amendment of the DCUSA shall comply with the provisions of paragraph 13; and 

  

	 	(d)	those parts of the DCUSA specified pursuant to paragraph 8(g) shall not be amended without the prior approval of the Authority, which shall be sought in accordance with appropriate
procedures set out in the DCUSA. 

  

	12.	The DCUSA shall provide procedures for the making of amendments which shall secure:  

  

	 	(a)	that every proposed amendment is brought to the attention of all parties specified in or pursuant to paragraph 11(a); 

  

 88 

	 	(b)	that any and all representations made in respect of a proposed amendment shall be properly considered by the relevant decision-maker(s); 

  

	 	(c)	that the question of whether any proposed amendment better facilitates the achievement of the Applicable DCUSA Objectives is properly evaluated; 

  

	 	(d)	that an amendment report is prepared in such manner and having all such contents as may be specified, including (i) a proposed implementation date such as to enable any
proposed amendment to take effect as soon as practicable after the decision to implement it is reached, taking into account the complexity, importance and urgency of that amendment, and (ii) a summary of and copies of all submissions made in
respect of the proposed amendment; 

  

	 	(e)	that the proposed implementation date may be altered with the consent of or as directed by the Authority; and 

  

	 	(f)	that parties to the DCUSA may, having considered the amendment report prepared in accordance with sub-paragraph (d) above and whether that amendment would, as compared with the
existing provisions of the DCUSA, better facilitate the achievement of the Applicable DCUSA Objectives, vote for:  

  

	 	(i)	in the case of a proposed amendment to a part of the DCUSA not specified pursuant to paragraph 8(g) above, the implementation or rejection of that amendment, or

  

	 	(ii)	in the case of a proposed amendment to a part of the DCUSA specified pursuant to paragraph 8(g) above, a recommendation to the Authority to approve or reject that amendment,

  

 89 

 and that such votes shall be compiled so that the Panel may take such steps as are necessary to
facilitate the implementation of any proposed amendment or (as the case may be) to put forward a recommendation to the Authority. 
  

	13.	No amendment of the DCUSA may be made unless:  

  

	 	(a)	the parties to the DCUSA have voted, pursuant to paragraph 12(f)(i), in favour of the amendment described in the relevant amendment report; or 

  

	 	(b)	the Authority, having had regard to the Applicable DCUSA Objectives, directs the licensee, in conjunction with every other relevant electricity distributor, to amend the DCUSA in
such manner as is specified in that direction following the provision of a recommendation to the Authority by the parties to the DCUSA pursuant to paragraph 12 (f)(ii). 

 Part F: Other matters 
  

	14.	In relation to any industry document to which it is a party or under which it holds rights in respect of amendment, the licensee shall take all appropriate steps within its power,
and in accordance with the procedures applicable under or in relation to that document, to secure and implement such changes to the document as are necessary to give full and timely effect to, or are consequential upon, any amendment of the DCUSA,
and shall not take any steps to prevent or unduly delay such changes. 

  

	15.	Without prejudice to Parts B, C and E, the DCUSA must also provide for: 

  

	 	(a)	a copy of the DCUSA to be supplied to any person requesting it, upon payment of an amount not exceeding the reasonable costs of making and supplying such a copy;

  

	 	(b)	information about the operation of any of the DCUSA arrangements to be supplied upon request to the Authority and/or to be published by it or by the DCUSA Panel (having particular
regard to the provisions of section 105 of the Utilities Act 2000); and 

  

	 	(c)	the DCUSA Panel to be able to secure the compliance of any party to the DCUSA Accession Agreement with any of the requirements of this paragraph. 

  

 90 

 Part G: Termination of agreements 
  

	16.	Without prejudice to any accrued rights, liabilities, or obligations subsisting under any agreement for use of system to which the licensee is a party immediately before the date of
any direction given by the Authority under paragraph 2, each such agreement shall cease to have effect from the date of that direction. 

 Part H: Interpretation 
  

	17.	In this condition, unless the context otherwise requires: 

 “amendment” should be construed in accordance with the meaning given to “modification” in section 111 of the Act; 
 “approval” means approval in writing; 
 “direction” means a direction given in writing (and includes an approval
or a consent); 
 “GB System Operator” means National Grid Electricity Transmission plc in its capacity as operator of the GB
transmission system (as defined in standard condition A1 of the transmission licence); 
 “industry documents” means any of: 

  

	 	(a)	the Balancing and Settlement Code, 

  

	 	(b)	the Connection and Use of System Code, 

  

	 	(c)	the Distribution Code, 

  

	 	(d)	the Grid Code, 

  

	 	(e)	the Revenue Protection Code, 

  

	 	(f)	the System Operator Transmission Owner Code, 

  

	 	(g)	the Master Registration Agreement, and 

  

 91 

	 	(h)	any other document designated by the Authority for the purposes of paragraph 14 following consultation with the licensee; 

 “relevant electricity distributor” means an electricity distributor in whose licence this condition has effect; and 
 “specified” means specified in the DCUSA. 
  

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 Condition 10. Balancing and Settlement Code and NETA Implementation 
  

	1.	Insofar as the licensee shall distribute or offer to distribute electricity within Great Britain, the licensee shall be a party to the BSC Framework Agreement and shall comply with
the BSC. 

  

	2.	The licensee shall comply with the programme implementation scheme established in accordance with paragraph 3 as modified from time to time in accordance with paragraph 5.

  

	3.	The programme implementation scheme is a scheme designated by the Secretary of State setting out the steps, including without limitation steps as to the matters referred to in
paragraph 4, to be taken (or procured) by the licensee (and/or by authorised electricity operators) which are, in the Secretary of State’s opinion, appropriate in order to give full and timely effect to: 

  

	 	(a)	any modifications made to this licence and to the licences of authorised electricity operators by the Secretary of State pursuant to the power vested in him under section 15A of the
Act; 

  

	 	(b)	any conditions imposed by any exemption from the requirement to hold any such licence; and 

  

	 	(c)	the matters envisaged by such modifications and conditions. 

  

	4.	The programme implementation scheme may include provisions, inter alia, 

  

	 	(a)	to secure or facilitate the amendment of any of the core industry documents; 

  

	 	(b)	to secure that any systems, persons or other resources employed in the implementation of the Pooling and Settlement Agreement may be employed in the implementation of the BSC;

  

	 	(c)	for the giving of the indemnities against liabilities to which parties to the Pooling and Settlement Agreement may be exposed; 

  

	 	(d)	for securing the co-ordinated and effective commencement of implementation of and operations under the BSC, including the testing, trialling and start-up of the systems, processes
and procedures employed in such implementation and employed by authorised electricity operators and others in connection with such operations; 

  

 93 

	 	(e)	for co-ordinating the administration and implementation of the BSC and the administration of the Pooling and Settlement Agreement; 

  

	 	(f)	for the licensee to refer to the Authority for determination, whether of its own motion or as provided in the programme implementation scheme, disputes, as to matters covered by the
scheme, between persons who are required (by conditions of their licences or exemptions) or who have agreed to comply with the scheme or any part of it; and 

  

	 	(g)	for the Authority, in the circumstances set out in the scheme, to require that consideration be given to the making of a proposal to modify the BSC and, if so, to require the making
of such proposal in the manner set out in the scheme, such power to be exercisable at any time within the period of 12 months after the start of the first period for trading under the BSC as determined by the Secretary of State.

  

	 5.      (a) 
	 The Secretary of State may at any time direct, in accordance with the provisions of the programme implementation scheme, that the programme
implementation scheme be modified in the manner set out in such direction, in order to give (or continue to give) full and timely effect to the matters described in paragraph 3. 

  

	 	(b)	The Secretary of State shall serve a copy of any such direction on the licensee, and thereupon the licensee shall comply with the scheme as modified by the direction.

  

	6.	If there is any conflict between the requirements contained in the programme implementation scheme pursuant to paragraph 4(a) and/or imposed on the licensee by paragraphs 2 and 5 of
this condition, and those imposed on the licensee by any other condition, the provisions of paragraph(s) 4(a), 2 and/or 5 (as appropriate) shall prevail. 

  

 94 

	7.	Without prejudice to paragraph 2, the licensee shall use all reasonable endeavours to do such things as may be requisite and necessary in order to give full and timely effect to the
modifications made to this licence as determined by the Secretary of State pursuant to the power vested in him under section 15A of the Act (and to give full and timely effect to the matters envisaged by such modifications).

  

	8.	In this condition: 

  

			
	“BSC”	  	means the balancing and settlement code required to be in place, pursuant to the transmission licence granted to the system operator, as from time to time modified.
		
	“BSC Framework Agreement”	  	means the agreement of that title, in the form approved by the Secretary of State, by which the BSC is made contractually binding between the parties to that agreement, as from time to time
amended, with the consent of the Secretary of State.
		
	“core industry documents”	  	mean those documents which:
		
		  	 (a)      in the Secretary of State’s opinion are central industry documents associated with the
activities of the licensee and authorised electricity operators, the subject matter of which relates to or is connected with the BSC or the balancing and settlement arrangements, and

		
		  	 (b)      have been so designated by the Secretary of State.

  

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 Condition 11. Change Co-ordination for BSC 
  

	1.	Insofar as the licensee shall distribute or offer to distribute electricity within any area of Great Britain, the licensee shall take all reasonable measures to secure and implement
(consistently with the procedures applicable under or in relation to the core industry documents to which it is party (or in relation to which it holds rights in respect of amendment) as modified or replaced from time to time), and shall not take
any steps to prevent or unduly delay, changes to those documents, such changes being changes which are appropriate in order to give full and timely effect to and/or in consequence of any modification which has been made to the BSC.

  

	2.	For the purposes of paragraph 1, core industry documents has the meaning given in paragraph 8 of standard condition 10 (Balancing and Settlement Code and NETA Implementation).

  

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 Condition 12. Settlement Agreement for Scotland 
  

	1.	Subject to paragraph 2, in so far as the licensee shall distribute or offer to distribute electricity within any area of Scotland or to the extent that the Settlement Agreement for
Scotland may apply in respect of the activities of the distribution business, the licensee shall comply with the relevant provisions of the Settlement Agreement for Scotland. 

  

	2.	The Authority may (with the consent of the Secretary of State and following [see amendment dated 26 Aug 04 Annex 3] consultation with the licensee and such other persons as the
Authority determines appropriate) where it considers it consistent with, or necessary or expedient for, the successful implementation and operation of BETTA, issue directions relieving the licensee of such of its obligations under this condition
(whether in part or in whole) as the Authority deems appropriate. 

  

	3.	In this condition: 

 “Settlement Agreement for
Scotland” means the agreement of that title, as nominated by the Authority for the purposes of this condition, to be prepared in accordance with and comprise such matters as are set out in special condition I (The Settlement Agreement for
Scotland) of each of the electricity distribution licences of SP Distribution Limited, and Scottish Hydro-Electric Power Distribution Limited (and any other name by which any of these companies come to be known), as from time to time revised with
the approval of the Authority. 
  

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 Condition 12A. Not used 
  

 98 

 Condition 13. Change Co-ordination for the Utilities Act 2000 
  

	1.	The licensee shall take all reasonable measures to secure and implement, and shall not take any steps to prevent or unduly delay, such changes to the industry framework documents as
are necessary or expedient to give full and timely effect to the provisions of the Utilities Act 2000. 

  

	2.	In complying with paragraph 1, the licensee shall act in the case of each industry framework document consistently with the change procedures currently applicable to that document,
except where to do so would be inconsistent with any provision of the Utilities Act 2000, in which event that provision shall take precedence. 

  

	3.	For the purposes of this condition, “industry framework document” means, subject to paragraph 4, any of the following documents to which the licensee is a party, or in
relation to which it holds rights in respect of amendment or termination, together with any documents which are supplemental or ancillary thereto: 

  

	 	(a)	the Pooling and Settlement Agreement; 

  

	 	(b)	the Balancing and Settlement Code; 

  

	 	(c)	Master Connection and Use of System Agreement or the Connection and Use of System Code; 

  

	 	(d)	the Settlement Agreement for Scotland; 

  

	 	(e)	the Master Registration Agreement; 

  

	 	(f)	the Data Transfer services Agreement; 

  

	 	(g)	the Radio Teleswitch Agreement; 

  

	 	(h)	any Grid Code or Scottish Grid Code; 

  

	 	(i)	any Distribution Code; 

  

	 	(j)	the Trading Code; 

  

	 	(k)	the Fuel Security Code; 

  

	 	(l)	any agreement for use of an interconnector or Scottish interconnection; and 

  

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	 	(m)	any agreement for the provision of distribution use of system, meter provision services, meter maintenance services, data retrieval services, data processing services, data
aggregation services, or prepayment meter services. 

  

	4.	Where the Authority considers that the list of industry framework documents set out in paragraph 3 should be modified for the purposes of this condition generally, the licensee
shall discuss any proposed modification (including addition) to the list in good faith and use all reasonable endeavours to agree such modification with the Authority. 

  

	5.	This condition shall cease to have effect on 30 June 2002 or such earlier date as the Authority may specify in a direction given for the purposes of this condition generally.

  

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 Condition 14. Provision of the Metering Point Administration Service and Compliance with the Master Registration
Agreement 
  

	1.	The licensee shall be a party to and shall comply with the provisions of the Master Registration Agreement. 

  

	2.	The licensee shall establish, or procure the establishment of, and subsequently operate and maintain, or procure the subsequent operation and maintenance of, a service to be known
as the “Metering Point Administration Service.” 

  

	3.	The Metering Point Administration Service shall fulfil the following functions: 

  

	 	(a)	the maintenance of such a register of technical and other data as is necessary to facilitate supply by any electricity supplier to all premises connected to the licensee’s
distribution system and to meet the reasonable requirements of electricity suppliers in respect of such premises for information for settlement purposes, including (where so required): 

  

	 	(i)	the identity of the electricity supplier responsible under the Balancing and Settlement Code (where the premises are within Great Britain) and/or the Settlement Agreement for
Scotland (where the premises are within Scotland) for the metering point at such premises; 

  

	 	(ii)	the type of metering equipment installed at each such premises; and 

  

	 	(iii)	a unique and accurate address of each such premises so far as is reasonably practicable having regard to the nature and source of the information provided to the licensee;

  

	 	(b)	the amendment of the register maintained in accordance with subparagraph (a) to reflect changes of electricity supplier in respect of any premises; 

  

	 	(c)	the provision, in a timely and efficient manner, of such data contained in the register as is reasonably required and requested to: 

  

	 	(i)	any electricity supplier or agent thereof; 

  

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	 	(ii)	any person identified in the Balancing and Settlement Code (where the premises are within Great Britain) and/or the Settlement Agreement for Scotland (where the premises are within
Scotland) as an appropriate person for the receipt of data for settlement purposes; and 

  

	 	(iii)	any person identified in the Master Registration Agreement as entitled to such data for the purpose of facilitating changes of electricity supplier in respect of any premises; and

  

	 	(d)	the maintenance of an enquiry service for the provision to any customer or an electricity supplier, on request and free of charge to that customer, of such data contained in the
register as is relevant to the supply of electricity to premises which are (or are to be) owned or occupied by the customer, and the taking of such steps as will in the opinion of the licensee secure adequate publicity for the operation of the
enquiry service. 

  

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 Condition 14A. Basis of Charges for Metering Point Administration Services: Requirements for Transparency

  

	1.	The licensee shall as soon as practicable prepare a statement in a form approved by the Authority setting out the basis upon which charges will be made for the provision of metering
point administration services, in such form and with such detail as shall be necessary to enable an electricity supplier to make a reasonable estimate of the charges to which the electricity supplier would become liable to pay for the provision of
such services and of the other terms, likely to have a material impact on the conduct of the electricity supplier’s business, upon which the service would be provided and (without prejudice to the foregoing) including the information set out in
paragraph 2. 

  

	2.	The statement referred to in paragraph 1 shall include a schedule of charges for metering point administration services, together with an explanation of the methods by which and the
principles on which such charges will be calculated. 

  

	3.	The Authority [see amendment dated 25 July 03] may, upon the written request of the licensee, issue a direction relieving the licensee of its obligations under paragraph 1
to such extent and subject to such terms and conditions as the Authority may specify in that direction. 

  

	4.	The licensee shall not in setting its charges for, or in setting the other terms that will apply to the provision of metering point administration services, restrict, distort or
prevent competition in the generation, distribution or supply of electricity. 

  

	5.	The licensee:- 

  

	 	(a)	shall, at least once in every year, review the information set out in the statement prepared in accordance with paragraph 1 in order that the information set out in such a statement
shall continue to be accurate in all material respects; and 

  

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	 	(b)	may, with the approval of the Authority, from time to time alter the form of such a statement. 

  

	6.	The licensee shall send a copy of the statement prepared in accordance with paragraph 1, and of each revision of such statement, to the Authority. 

  

	7.	The licensee shall give or send a copy of the statement prepared in accordance with paragraph 1, or (as the case may be) of the latest revision of such statement, to any person who
requests a copy of such statement. 

  

	8.	The licensee may make a charge for any statement given or sent pursuant to paragraph 7 of an amount which shall not exceed the amount specified in directions issued by the Authority
for the purposes of this condition based on the Authority’s estimate of the licensee’s reasonable costs of providing such a statement. 

  

 104 

 Condition 14B. Non-Discrimination in the Provision of Metering Point Administration Services 
  

	1.	In the provision of metering point administration services the licensee shall not discriminate between any electricity suppliers. 

  

	2.	Without prejudice to paragraph 1, and subject to the provisions of standard condition 14A (Basis of Charges for Metering Point Administration Services: Requirements for
Transparency), the licensee shall not make charges for the provision of metering point administration services to any electricity supplier which differ from the charges for such provision to any other electricity supplier except in so far as such
differences reasonably reflect differences in the costs associated with such provision. 

  

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 Condition 14C. Requirement to Offer Terms for the Provision of Metering Point Administration Services 

 

	1.	This condition sets out the obligations relating to the metering point administration services pursuant to and in accordance with the Master Registration Agreement.

  

	2.	On application made by any electricity supplier for any premises connected to the licensee’s distribution system, the licensee shall (subject to paragraph 5) offer to enter
into an agreement for the provision of metering point administration services. 

  

	3.	In making an offer pursuant to this condition to enter into an agreement, the licensee shall set out:- 

  

	 	(a)	the date by which the metering point administration services required shall be provided (time being of the essence, unless otherwise agreed between parties);

  

	 	(b)	the charges to be paid in respect of the metering point administration services required, such charges (unless manifestly inappropriate):- 

  

	 	(i)	to be presented in such a way as to be referable to the statement prepared in accordance with paragraph 1 of standard condition 14A (Basis of Charges for Metering Point
Administration Services: Requirements for Transparency) or any revision thereof; 

  

	 	(ii)	to be in conformity with the requirements of standard condition 14A (Basis of Charges for Metering Point Administration Services: Requirements for Transparency).

  

	 	(c)	such other detailed terms in respect of each of the metering point administration services required as are or may be appropriate for the purpose of the agreement.

  

	4.	The licensee shall offer terms for an agreement in accordance with paragraph 2 as soon as practicable and (save where the Authority consents to a longer period) in any event not
more than 28 days after receipt by the licensee (or its agent) from an electricity supplier of an application containing all such information as the licensee may reasonably require for the purpose of formulating the terms of the offer.

  

 106 

	5.	The licensee shall not be obliged pursuant to this condition to offer to enter or to enter into any agreement if to do so would be likely to involve the licensee being:-

  

	 	(a)	in breach of its duties under section 9 of the Act; 

  

	 	(b)	in breach of any regulations made under section 29 of the Act or of any other enactment relating to safety or standards applicable in respect of the distribution business;

  

	 	(c)	in breach of the Grid Code or any Distribution Code; or 

  

	 	(d)	in breach of the conditions. 

  

	6.	The licensee shall undertake metering point administration services in the most efficient and economic manner practicable having regard to the alternatives available and the other
requirements of the licence and of the Act in so far as they relate to the provision of such services. 

  

	7.	In the provision of metering point administration services the licensee shall not restrict, distort or prevent competition in the supply of electricity. 

  

 107 

 Condition 14D. Functions of the Authority 
  

	1.	If, after a period which appears to the Authority to be reasonable for the purpose, the licensee has failed to enter into an agreement with an electricity supplier entitled or
claiming to be entitled thereto pursuant to a request under standard condition 14C (Requirement to Offer Terms for the Provision of Metering Point Administration Services), the Authority may, on the application of such an electricity supplier or the
licensee, settle any terms of the agreement in dispute between the licensee and the electricity supplier in such manner as appears to the Authority to be reasonable having (insofar as relevant) regard in particular to the following considerations:

  

	 	(a)	that the performance by the licensee of its obligations under the agreement should not cause it to be in breach of those provisions referred to at paragraph 5 in standard condition
14C (Requirement to Offer Terms for the Provision of Metering Point Administration Services); and 

  

	 	(b)	that the terms and conditions of the agreement so settled by the Authority and of any other agreements entered into by the licensee pursuant to a request under standard condition
14C (Requirement to Offer Terms for the Provision of Metering Point Administration Services) should be in as similar a form as is practicable. 

  

	2.	In so far as an electricity supplier entitled or claiming to be entitled to an offer under standard condition 14C (Requirement to Offer Terms for the Provision of Metering Point
Administration Services) wishes to proceed on the basis of the agreement as settled by the Authority pursuant to paragraph 1, the licensee shall forthwith enter into and implement such agreement in accordance with its terms.

  

	3.	If either party to such agreement proposes to vary the contractual terms of any agreement for the provision of metering point administration services entered into pursuant to
standard condition 14C (Requirement to Offer Terms for the Provision of Metering Point Administration Services) in any manner provided for under such agreement, the Authority may, at the request of that party, settle any dispute relating to such
variation in such manner as appears to the Authority to be reasonable. 

  

 108 

	4.	The Authority may (following consultation with the licensee) issue directions relieving the licensee of its obligations under standard condition 14C (Requirement to Offer Terms for
the Provision of Metering Point Administration Services) relating to metering point administration services in respect of such parts of that condition and to such extent as may be specified in the directions. 

  

 109 

 Condition 15. Compliance with the Grid Code 
  

	1.	The licensee shall comply with the provisions of the Grid Code in so far as applicable to it. 

  

	2.	The Authority may (following consultation with any transmission licensee likely to be affected) issue directions relieving the licensee of its obligation under paragraph 1 in
respect of such parts of the Grid Code and to such extent and subject to such conditions as may be specified in those directions. 

  

 110 

 Condition 16. Security Arrangements 
  

	1.	Insofar as the licensee shall distribute or offer to distribute electricity within any area of England and Wales, the licensee shall comply with the provisions of the Fuel Security
Code and such provisions shall have effect as if they were set out in this licence. 

  

	2.	Insofar as the licensee shall distribute or offer to distribute electricity within any area of Scotland: 

  

	 	(a)	if so directed in directions issued by the Authority for the purposes of this condition, the licensee shall, not later than such date as may be specified in such directions, enter
into an agreement designated by the Secretary of State for the purposes of this condition relating to compliance with directions issued by the Secretary of State under section 34 and/or section 35 of the Act; and 

  

	 	(b)	the licensee shall comply with and perform its obligations under any agreement which it enters into pursuant to sub-paragraph (a) above. 

  

	3.	In this condition: 

  

			
	“Fuel Security Code”	  	means the document of that title designated as such by the Secretary of State as from time to time amended.

  

 111 

 Condition 17. Provision of Services for Persons who are of Pensionable Age or Disabled or Chronically Sick

  

	1.	The licensee shall, with effect from [amendment dated 7 Nov 03] 1 November 2001 or on the date on which this licence is granted whichever is the later, prepare and submit to
the Authority for its approval a code of practice detailing the special services the licensee will make available for domestic customers who are of pensionable age or disabled or chronically sick. 

  

	2.	The code of practice shall include arrangements whereby the licensee will: 

  

	 	(a)	maintain a register of customers who have special communication needs or depend on electricity for medical reasons by virtue of being of pensionable age or disabled or chronically
sick, and who require advance notice of planned interruptions to the supply of electricity, comprising the relevant details of each customer who requests or whose supplier requests his inclusion on it; 

  

	 	(b)	give to all customers so registered, either via the relevant supplier or, where appropriate, directly, in respect of interruptions to the supply of electricity, such information and
advice as may be appropriate and is of such nature as shall be set out in the code of practice, provided that where the licensee is providing the supplier with any such information, the licensee shall provide such information as soon as is
practicable; and 

  

	 	(c)	in the case where the request for the inclusion in the register is made directly to the licensee, provide the relevant supplier with the relevant details in such form and at such
intervals as is relevant to the supplier’s licence obligations. 

  

	3.	This condition is subject to the provisions of standard condition 22 (Preparation, Review of and Compliance with Customer Service Codes). 

  

 112 

 Condition 18. Provision of Services for Persons who are Blind or Deaf 
  

	1.	The licensee shall, with effect from [see amendment dated 7 Nov 03] 1 November 2001 or on the date on which this licence is granted whichever is the later, prepare and submit
to the Authority for its approval a code of practice detailing the special services the licensee will make available for domestic customers who are disabled by virtue of being blind or partially sighted, or deaf or hearing impaired.

  

	2.	The code of practice shall include arrangements by which the licensee will, on request, in each case free of charge: 

  

	 	(a)	make available to blind and partially sighted domestic customers a facility for enquiring or complaining about any service provided by the licensee, by telephone or other
appropriate means; and 

  

	 	(b)	make available to deaf and hearing impaired domestic customers, being in possession of appropriate equipment, facilities to assist them in enquiring or complaining about any service
provided by the licensee. 

  

	3.	This condition is subject to the provisions of standard condition 22 (Preparation, Review of and Compliance with Customer Service Codes). 

  

 113 

 Condition 19. Code of Practice on Procedures with Respect to Site Access 
  

	1.	The licensee shall, with effect from [see amendment 7 Nov 03] 1 November 2001 or on the date on which this licence is granted whichever is the later, prepare and submit to the
Authority for its approval a code of practice setting out the principles and procedures the licensee will follow in respect of any person acting on its behalf who requires access to customers’ premises. 

  

	2.	The code of practice shall include procedures calculated to ensure that persons visiting customers’ premises on behalf of the licensee: 

  

	 	(a)	possess the skills necessary to perform the required duties; 

  

	 	(b)	are readily identifiable to members of the public; 

  

	 	(c)	use passwords provided for vulnerable customers; 

  

	 	(d)	are appropriate persons to visit and enter customers’ premises; 

  

	 	(e)	are able to inform customers, on request, of a contact point for help and advice they may require in relation to the safety and security of the supply of the electricity; and

  

	 	(f)	comply with the provisions of the Rights of Entry (Gas and Electricity Boards) Act 1954. 

  

	3.	This condition is subject to the provisions of standard condition 22 (Preparation, Review of and Compliance with Customer Service Codes). 

  

 114 

 Condition 20. Payments in Relation to Standards of Performance 
  

	1.	With effect from 1 April 2005, the licensee shall not enter into any use of system agreement with an electricity supplier which does not contain appropriate provisions
requiring the licensee, where it has not made payments directly to a customer in respect of its own performance or that of another electricity distributor in relation to a distribution system within the distribution services area of the licensee
pursuant to any provision of regulations made under section 39A of the Act (“the regulations”), to make payments in respect of its own or that other electricity distributor’s performance to the electricity supplier for the benefit of
any customer of that electricity supplier equivalent to such sums as would have been paid pursuant to any provision of the regulations. 

  

	2.	The licensee shall take all appropriate steps within its power to ensure that any existing use of system agreement it has with an electricity supplier is so amended with effect from
1 April 2005, or as soon as may be thereafter, that the agreement is compliant in all material respects with the requirements of paragraph 1. 

  

	3.	The licensee shall not enter into or allow to continue any agreement, either for connection to or use of the distribution system, with any other licensed distributor (“the
other distributor”) that does not provide: 

  

	 	(a)	for the licensee to make payments in respect of its performance pursuant to any provision of the regulations to the other distributor for onward transmission to a customer whose
premises are directly connected to the other distributor’s distribution system; 

  

	 	(b)	for the licensee and the other distributor to agree the extent of responsibility of each licensee (where relevant) in relation to any failure to meet a prescribed level of
performance pursuant to any provision of the regulations; 

  

 115 

	 	(c)	for the other distributor, where he is liable to make payments pursuant to any provision of regulation 5, 6, 7 or 9, and that liability arises wholly or partly from a failure, act
or omission on the part of the licensee, to recover from the licensee all or (as appropriate) part of the cost of those payments (including financing costs where any such payments have already been made to the customer or a supplier for onward
transmission to the customer); 

  

	 	(d)	for the Authority, on the application of either licensee, to settle any dispute in such a manner as appears to the Authority to be reasonable where: 

  

	 	(i)	the licensee has failed to agree with the other distributor the extent of the responsibility of each licensee (where relevant) in relation to any failure to meet a prescribed level
of performance pursuant to any provision of the regulations, as provided for in paragraph 3(b), or 

  

	 	(ii)	the other distributor has been unable to recover from the licensee the costs that it considers are due under paragraph 3(c); 

 and 
  

	 	(e)	for the licensee to pay to the other distributor such costs (including, where appropriate, financing costs) as may be determined under paragraph 3(d) as soon as is reasonably
practicable. 

  

 116 

 Condition 21. Complaint Handling Procedure 
  

	1.	The licensee shall, no later than 1 November 2001 or on the date on which this licence is granted whichever is the later, prepare and submit to the Authority for its approval a
code of practice detailing the procedure for handling complaints from domestic customers about the manner in which the licensee conducts its distribution business. 

  

	2.	Any procedure established in accordance with this condition shall specify the periods within which it is intended that different descriptions of complaint should be processed and
resolved. 

  

	3.	This condition is subject to the provisions of standard condition 22 (Preparation, Review of and Compliance with Customer Service Codes). 

  

 117 

 Condition 22. Preparation, Review of and Compliance with Customer Service Codes 
  

	1.	This condition applies to any code of practice required to be prepared by the licensee pursuant to standard condition 17 (Provision of Services for Persons who are of Pensionable
Age or Disabled or Chronically Sick), standard condition 18 (Provision of Services for Persons who are Blind or Deaf), standard condition 19 (Code of Practice on Procedures in Respect of Site Access) and standard condition 21 (Complaint Handling
Procedure) of this licence. 

  

	2.	In first preparing such a code the licensee shall, prior to submitting that code to the Authority, consult the Consumer Council and shall have regard to any representations made by
the Consumer Council about such code or the manner in which it is likely to be operated. 

  

	3.	Where before the expiry of 30 days of the licensee first submitting such code to the Authority for its approval the Authority notifies the licensee that the Authority considers the
code is not sufficient for the purposes of meeting the requirements of this licence, the licensee shall forthwith make such changes as the Authority may require. 

  

	4.	The licensee shall, whenever requested to do so by the Authority, review such code and the manner in which it has been operated, with a view to determining whether any modification
should be made to it or to the manner of its operation. 

  

	5.	In carrying out any such review the licensee shall consult the Consumer Council and shall have regard to any representations made by the Consumer Council about such code or the
manner in which it is likely to be or (as the case may be) has been operated. 

  

	6.	The licensee shall submit any revision of such code which, after consulting the Consumer Council in accordance with paragraph 5, the licensee wishes to make, to the Authority for
its approval and following its approval in writing shall then revise the code accordingly. 

  

 118 

	7.	The licensee shall: 

  

	 	(a)	as soon as practicable following the preparation of any code or any revision made to it send to the Authority and the Consumer Council a copy of such code or such revision (in each
case in the form approved by the Authority); 

  

	 	(b)	at least once in each year, draw the attention of those customers to whom such code applies, to the existence of the code and of each substantive revision of it and to the means by
which a copy of such code may be inspected in its latest form, in such manner as in the reasonable opinion of the licensee will give adequate publicity to it; and 

  

	 	(c)	give or send free of charge a copy of such code (as from time to time revised) to any person who requests it. 

  

	8.	No changes may be made to any code otherwise than in accordance with the foregoing procedures. 

  

	9.	The licensee shall ensure, so far as reasonably practicable, that it complies with such arrangements or procedures (as the case may be) as are contained in or described by any code
to which this condition applies and approved by the Authority or any revision to such code approved by the Authority. 

  

 119 

 Condition 23. Record of and Report on Performance 
  

	1.	The licensee shall keep a record of its general operation of the arrangements mentioned in standard conditions 17 to 22 and if the Authority so directs in writing, of its operation
of any particular cases specified, or of a description specified, by the Authority. 

  

	2.	The licensee shall keep a statistical record of its performance in relation to the provision of services to domestic customers. 

  

	3.	The licensee shall, from time to time as required by the Authority, provide to the Authority and to the Consumer Council such of the information contained in the records prepared in
accordance with paragraphs 1 and 2 as the Authority may request in writing. 

  

	4.	As soon as is reasonably practicable after the end of each calendar year, the licensee shall submit to the Authority and the Consumer Council a report dealing with the matters
mentioned in paragraphs 1 and 2 in relation to that year and shall: 

  

	 	(a)	publish the report so submitted in such manner as will in the reasonable opinion of the licensee secure adequate publicity for it; and 

  

	 	(b)	send a copy of it free of charge to any person requesting one, 

 except that, in performing its obligations under sub-paragraphs (a) and (b), the licensee shall exclude from the report such information as appears to it to be necessary or expedient to ensure that, save where they consent, individual
domestic customers referred to therein cannot readily be identified. 
  

	5.	The report shall be presented, so far as is reasonably practicable, in a standard form designated by the Authority for the purposes of this condition. 

  

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 Condition 24. Provision of Information to the Authority 
  

	1.	Subject to paragraphs 5 and 7, the licensee shall furnish to the Authority, in such manner and at such times as the Authority may reasonably require, such information and shall
procure and furnish to it such reports, as the Authority may reasonably require or as may be necessary for the purpose of performing: 

  

	 	(a)	the functions conferred on it by or under the Act; and 

  

	 	(b)	any functions transferred to or conferred on it by or under the Utilities Act 2000. 

  

	2.	The licensee shall procure from each company or other person which the licensee knows or reasonably should know is at any time an ultimate controller of the licensee a legally
enforceable undertaking in favour of the licensee in a form specified by the Authority that that ultimate controller (“the information covenantor”) will give to the licensee, and will procure that any person (including, without limitation,
a corporate body) which is a subsidiary of, or is controlled by, the information covenantor (other than the licensee and its subsidiaries) will give to the licensee, all such information as may be necessary to enable the licensee to comply fully
with the obligation imposed on it in paragraph 1. Such undertaking shall be obtained within 7 days of such corporate body or other person in question becoming an ultimate controller of the licensee and shall remain in force for so long as the
licensee remains the holder of this licence and the information covenantor remains an ultimate controller of the licensee. 

  

	3.	The licensee shall deliver to the Authority evidence (including a copy of each such undertaking) that the licensee has complied with the obligation to procure undertakings pursuant
to paragraph 2, and shall comply with any direction from the Authority to enforce any undertaking so procured. 

  

	4.	The licensee shall not, save with the consent in writing of the Authority, enter (directly or indirectly) into any agreement or arrangement with any ultimate controller of the
licensee or, where the ultimate controller is a corporate body, any of the subsidiaries of such a corporate ultimate controller (other than the subsidiaries of the licensee) at a time when: 

  

	 	(a)	an undertaking complying with paragraph 2 is not in place in relation to that ultimate controller; or 

  

 121 

	 	(b)	there is an unremedied breach of such undertaking; or 

  

	 	(c)	the licensee is in breach of the terms of any direction issued by the Authority under paragraph 3 of this condition. 

  

	5.	The licensee shall not be required by the Authority to furnish it under this condition with information for the purpose of the exercise of its functions under section 47 of the Act.

  

	6.	The licensee shall, if so requested by the Authority, give reasoned comments on the accuracy and text of any information or advice (so far as relating to its activities as holder of
an electricity distribution licence) which the Authority proposes to publish pursuant to section 48 of the Act. 

  

	7.	This condition shall not require the licensee to produce any documents or give any information which it could not be compelled to produce or give in evidence in civil proceedings
before a court. 

  

	8.	The power of the Authority to call for information under this condition is in addition to the power of the Authority to call for information under or pursuant to any other
condition. There shall be a presumption that the provision of information in accordance with any other condition is sufficient for the purposes of that condition, but that presumption shall be rebutted, if the Authority states in writing that in its
opinion such further information is, or is likely to be, necessary to enable it to exercise functions under the condition in question. 

  

 122 

 Condition 25. Long Term Development Statement 
  

	1.	The purposes of this condition are: 

  

	 	(a)	to secure the provision by the licensee of information which will assist any person who contemplates entering into distribution arrangements with the licensee to identify and
evaluate the opportunities for doing so; and 

  

	 	(b)	to ensure the general availability of such information in the public domain. 

  

	2.	Where the Authority gives the licensee a direction to do so, the licensee shall prepare and maintain a statement in such form as may be specified in the direction for the purposes
of this condition generally, containing, with respect to each of the 5 succeeding years on a rolling basis beginning with 1st April in any year, such information as it is reasonably practicable for the licensee to provide which identifies or relates to the matters specified in paragraph 4. 

  

	3.	The direction specified in paragraph 2 may be given by the Authority at any time during a year. Any statement to be prepared by the licensee pursuant to paragraph 2 shall be
prepared within 3 months of the giving of the direction. The licensee shall be obliged to include in the first such statement prepared the information referred to in paragraph 2 with respect to each year of the 5 succeeding years on a rolling basis
beginning with 1st April of the year in which the direction is given. 

  

	4.	The matters referred to at paragraph 2 are: 

  

	 	(a)	the use likely to be made of the licensee’s distribution system; 

  

	 	(b)	the likely development of the licensee’s distribution system; 

  

	 	(c)	the likely development of those facilities which the licensee expects to be taken into account from time to time in determining charges for making connections to its distribution
system and for use of system; 

  

 123 

	 	(d)	the licensee’s plans for modifying its distribution system, including works which it expects to be carried out for that purpose within the forthcoming 2 years (from the date of
the statement); 

  

	 	(e)	the identification of those parts of the licensee’s distribution system which are likely to reach the limit of their capability during the succeeding 5 year period, including
those parts which may experience thermal overloading, voltage problems or excess fault levels; 

  

	 	(f)	the licensee’s plans to alleviate or rectify any predicted shortcomings in the operation and/or capability of its distribution system; and 

  

	 	(g)	(where applicable) how the actual developments in the recent past compared with the licensee’s plans contained in previous statements. 

  

	5.	Any statement to be prepared by the licensee pursuant to paragraph 2 shall be prepared within 3 months of the giving of the relevant direction. 

  

	6.	Except in so far as the Authority otherwise consents, the licensee shall on an annual basis prepare a revision of any statement prepared under paragraph 2 so as to ensure that, so
far as is reasonably practicable, the information in the revised statement is up to date. 

  

	7.	The licensee shall, subject to any requirement to comply with the listing rules (within the meaning of Part IV of the Financial Services Act 1986) of The Stock Exchange and with
paragraph 8 – 

  

	 	(a)	furnish the Authority with a copy of the statement prepared under paragraph 2 and of each revision of the statement prepared under paragraph 6; 

  

	 	(b)	in such form and manner as the Authority may direct, publish such a summary of the statement or, as the case may be, of a revision of the statement as will assist a person in
deciding whether to ask for a copy of the statement; 

  

 124 

	 	(c)	prepare a version of the statement or revision which excludes, so far as is practicable, any such matter as is mentioned in paragraph 8 and send a copy thereof to any person who
asks for one and makes such payment to the licensee in respect of the cost thereof as it may require not exceeding such amount as the Authority may from time to time approve for the purposes hereof. 

  

	8.	In complying with the requirements of paragraph 7(b), the licensee shall have regard to the need for excluding, so far as is practicable, any matter which relates to the affairs of
a person where the publication of that matter would or might seriously and prejudicially affect his interests. 

  

	9.	Any question arising under paragraph 8 as to whether the publication of some matter which relates to the affairs of a person would or might seriously and prejudicially affect his
interests shall be determined by the Authority. 

  

	10.	A direction given under paragraph 2 is only effective where the Authority has informed the licensee of its intention to do so in a notice which: 

  

	 	(a)	states the date on which it is proposed that the direction should take effect; 

  

	 	(b)	sets out the proposed contents of the direction with respect to the form in which the statement is to be prepared and maintained for the purposes of this condition;

  

	 	(c)	specifies the time (not being less than 28 days from the date of the notice) within which representations with respect to the proposed direction may be made,

 and has considered any representations which are duly made by the licensee and are not withdrawn. 
  

	11.	Any consultation undertaken by the Authority with the holder of a licence granted under section 6(1)(c) of the Act before the determination of this standard condition by the
Secretary of State pursuant to section 33(1) of the Utilities Act 2000 shall be effective for the purposes of paragraph 10. 

  

 125 

	12.	In this condition, “distribution arrangements” includes distribution arrangements which relate to – 

  

	 	(a)	the utilisation of the licensee’s distribution system; and 

  

	 	(b)	connections to the licensee’s distribution system. 

  

 126 

 Condition 26. Compliance with CUSC 
  

	1.	Insofar as the licensee distributes or offers to distribute to any premises situated in Great Britain, the licensee shall be a party to the CUSC Framework Agreement and shall comply
with the CUSC. 

  

	2.	The licensee shall take all reasonable steps to secure and implement (consistently with the procedures applicable under or in relation to the core industry documents to which it is
a party (or in relation to which it holds rights in respect of amendment) as modified or replaced from time to time), and shall not take any steps to prevent or unduly delay, changes to those documents, such changes being changes which are
appropriate in order to give full and timely effect to and/or in consequence of any modification which has been made to the CUSC. 

  

	3.	For the avoidance of doubt, paragraph 2 is without prejudice to any rights of approval, veto or direction in respect of proposed changes to the core industry documents which the
Authority may have. 

  

	4.	In this condition: 

  

			
	“core industry documents”	  	means those documents which have been designated by the Secretary of State as such.
		
	“CUSC”	  	means the Connection and Use of System Code required to be in place pursuant to the transmission licence granted to the system operator [see amendment dated 26 Aug 04 Annex 1] in Great
Britain, as from time to time modified.

  

 127 

			
	“CUSC Framework Agreement”	  	means the agreement of that title, in the form approved by the Secretary of State, by which the CUSC is made contractually binding between the parties to that agreement, as amended from time
to time with the approval of the Secretary of State.

  

 128 

 Condition 27. Not used 
  

 129 

 Condition 28. Not used 
  

 130 

 Condition 29. Disposal of Relevant Assets 
  

	1.	The licensee shall not dispose of or relinquish operational control over any relevant asset otherwise than in accordance with the following paragraphs of this condition.

  

	2.	Save as provided in paragraph 3, the licensee shall give to the Authority not less than two months’ prior written notice of its intention to dispose of or relinquish
operational control over any relevant asset, together with such further information as the Authority may request relating to such asset or the circumstances of such intended disposal or relinquishment of control or to the intentions in regard
thereto of the person proposing to acquire such asset or operational control over such asset. 

  

	3.	Notwithstanding paragraphs 1 and 2, the licensee may dispose of or relinquish operational control over any relevant asset: 

  

	 	(a)	where: 

  

	 	(i)	the Authority has issued directions 1
2 for the purposes of this condition containing a general consent (whether or not subject to conditions) to:

  

	 	(aa)	transactions of a specified description; or 

  

	 	(bb)	the disposal of or relinquishment of operational control over relevant assets of a specified description; and 

  

	 	(ii)	the transaction or the relevant assets are of a description to which such directions apply and the disposal or relinquishment is in accordance with any conditions to which the
consent is subject; or 

  

	 	(b)	where the disposal or relinquishment of operational control in question is required by or under any enactment or subordinate legislation. 

  

	1	Direction issued under Condition 27 of the Public Electricity Supply Licence of Manweb plc now Standard Condition 29 of this licence (01.04.92)

	2	General Consent issued under Standard Condition 29 of this licence 

  

 131 

	4.	Notwithstanding paragraph 1, the licensee may dispose of or relinquish operational control over any relevant asset as is specified in any notice given under paragraph 2 in
circumstances where: 

  

	 	(a)	the Authority confirms in writing that it consents to such disposal or relinquishment (which consent may be made subject to the acceptance by the licensee or any third party in
favour of whom the relevant asset is proposed to be disposed or operational control is proposed to be relinquished to) of such conditions as the Authority may specify; or 

  

	 	(b)	the Authority does not inform the licensee in writing of any objection to such disposal or relinquishment of control within the notice period referred to in paragraph 2.

  

	5.	In this condition: 

  

			
	“disposal”	  	 means:
  
 (a) in relation to disposal of a relevant asset situated in England and Wales includes any sale, gift, exchange, assignment, lease, licence, loan, mortgage, charge, or grant of any other encumbrance or the permitting
of any encumbrance to subsist or any other disposition;
  
 (b) in relation to disposal of
a relevant asset situated in Scotland includes the grant of any disposition, conveyance, contract of excambion, any lease, assignation, licence, the grant of any right of possession, loan, standard security, floating charge to a third party, or the
grant of any servitude right, wayleave or any other transaction or event which is capable under any enactment or rule of law of affecting the title to a registered interest in land and “dispose” and cognate expressions shall be construed
accordingly;

  

 132 

			
		  	includes, without limitation, entering into any agreement or arrangement whereby operational control of a relevant asset or relevant assets is not or ceases to be under the sole management of
the licensee.
		
	“relinquishment of operational control”	  	for the purposes of standard condition 29 (Disposal of Relevant Assets) only, has the meaning given in that condition. “remote transmission assets” means any electric lines,
electrical plant or meters in England and Wales owned by a transmission licensee (“the owner transmission licensee”) which: (a) are embedded in the licensee’s distribution system or the distribution system of any authorised
distributor and are not directly connected by lines or plant owned by the owner transmission licensee to a sub-station owned by the owner transmission licensee; and (b) are by agreement between the owner transmission licensee and the licensee or
such authorised distributor operated under the direction and control of the licensee or such authorised distributor. “revenue reporting rigs” for the purposes of standard condition 50 (Price Control Revenue Reporting and Associated
Information) only, means the regulatory instructions and guidance for the time being in force under that condition.

  

 133 

 Condition 30. Not used 
  

 134 

 Condition 30A. Not used 
  

 135 

 Condition 30B. BETTA run-off arrangements scheme 
  

	1.	The Licensee shall, to the extent applicable to it, comply with the BETTA run-off arrangements scheme (“the scheme”) established and as modified from time to time in
accordance with this condition. 

  

	2.	For the purposes of this condition, the objective of the scheme shall be the running-off of the non-GB trading and transmission arrangements to the extent that the Authority
considers it necessary or expedient to do so to ensure that those arrangements do not prevent or in any way hinder the successful and effective implementation of: 

  

	 	(a)	the modifications to this licence and each other licence made or to be made by the Secretary of State pursuant to the powers vested in her under Chapter 1 of Part 3 of the Energy
Act 2004 (Electricity trading and transmission); 

  

	 	(b)	the modifications or amendments to: 

  

	 	(i)	the BSC, CUSC and the Grid Code which are designated by the Secretary of State on or before 8 September 2004 pursuant to the powers vested in her under Chapter 1 of Part 3 of
the Energy Act 2004 (Electricity trading and transmission) or pursuant to any power under this or any other licence; and 

  

	 	(ii)	the STC, BSC, CUSC, Grid Code or any Scottish grid code which are directed by the Authority pursuant to the following provisions of the standard conditions for electricity
transmission licences: paragraph 7 of standard condition B12 (System Operator – Transmission Owner Code (STC), paragraph 6 of standard condition C3 (Balancing and Settlement Code (BSC), paragraph 8 of standard condition C10 (Connection and Use
of System Code (CUSC), paragraph 8 of standard condition C14 (Grid Code) and paragraph 6 of standard condition D9 (Licensee’s grid code), respectively; and, 

  

	 	(c)	the provisions of the STC which are designated by the Secretary of State on or before 8 September 2004 pursuant to the powers vested in her under Chapter 1 of Part 3 of the
Energy Act 2004 (Electricity trading and transmission) or pursuant to any power under this or any other licence, 

  

 136 

 and the matters envisaged by such modifications or amendments or the STC, as appropriate. 
  

	3.	The scheme shall be designated by the Secretary of State for the purposes of this condition, following such consultation as the Secretary of State deems appropriate with those
persons that the Secretary of State considers are likely to be affected by the scheme and such other persons as the Secretary of State deems appropriate. 

  

	4.	The scheme shall set out the steps to be taken (or procured) by the licensee or by any authorised electricity operator or by any person who undertakes to comply with the scheme,
which are, in the opinion of the Secretary of State or, in respect of any subsequent changes made to the scheme by the Authority pursuant to paragraph 6 below, in the opinion of the Authority, reasonably required in order to achieve the objective
described in paragraph 2. 

  

	5.	The scheme may provide, without limitation: 

  

	 	(a)	for all or some of its provisions to have contractual force; 

  

	 	(b)	for securing or facilitating the amendment of all or any of the relevant documents in a manner which is consistent with the objective described in paragraph 2; and

  

	 	(c)	for the making by the Authority of determinations in respect of such matters affecting such persons, including the licensee, as may be specified in the scheme.

  

	6.	The Authority may (with the consent of the Secretary of State) direct that the scheme be amended (following such consultation as the Authority deems appropriate with those persons
that the Authority considers are likely to be affected by such an amendment) where the Authority considers it necessary or expedient to do so for the purposes of achieving the objective described in paragraph 2. 

  

 137 

	7.	The Authority shall serve a copy of any such direction on the licensee, and thereupon, the licensee shall comply with the scheme as modified by the direction.

  

	8.	If the licensee becomes aware of any conflict between the requirements contained in the scheme and those imposed on the licensee by any other conditions of this licence, the
licensee shall forthwith give notice of such conflict to the Authority and shall comply with any direction of the Authority in relation to the same (which direction may only be made following such consultation with the licensee (and such other
persons as the Authority deems appropriate) in such manner as the Authority deems appropriate). 

  

	9.	The Authority may not make any direction under paragraph 6 of this condition after the BETTA go-live date. 

  

	10.	In this conditions: 

  

			
	“British Grid Systems Agreement”	  	means the agreement known as the British Grid Systems agreement and made between The National Grid Company plc, Scottish Hydro-Electric Plc and Scottish Power Plc and dated 30 March
1990, as amended or modified from time to time.
		
	“interconnection”	  	 means:
  
 the 275kV and 400kV circuits between and including the associated switchgear at Harker sub-station in Cumbria and the associated switchgear at Strathaven sub-station in Lanarkshire;
  
 the 275kV transmission circuit between and including the associated switchgear at Cockenzie in East
Lothian and the associated switchgear at Stella in Tyne and Wear; and

  

 138 

			
		 	the 400kV transmission circuit between and including the associated switchgear at Torness in East Lothian and the associated switchgear at Stella in Tyne and Wear
		
		 	all as existing at the date on which the transmission licence of each existing Scottish licensee comes into force as from time to time maintained, repaired or renewed, together with any
alteration, modification or addition (other than maintenance, repair or renewal) which is primarily designed to effect a permanent increase in one or more particular interconnection capacities as they exist immediately prior to such alteration,
modification or addition and as from time to time maintained, repaired or renewed; and
		
		 	 the 132kV transmission circuit between and including (and directly connecting) the associated switchgear at Chapelcross and the associated switchgear
at Harker sub-station in Cumbria, and
  
 the 132kV transmission circuit between and
including (and connecting, via Junction V) the associated switchgear at Chapelcross and the associated switchgear at the Harker sub-station in

  

 139 

			
		  	Cumbria, all as existing at the date on which the transmission licence of each existing Scottish licensee comes into force and as from time to time maintained, repaired or
renewed.
		
	“non-GB trading and transmission arrangements”	  	means those arrangements for, amongst other things, the separate trading or transmission of electricity in Scotland, the separate trading or transmission of electricity in England and Wales and
the trading or transmission of electricity between England and Wales (taken as a whole) and Scotland which are defined and governed by, amongst other things, the relevant documents.
		
	“relevant documents”	  	means the documents which relate to the non-GB trading and transmission arrangements, including without limitation:
		
		  	 (a)    the Settlement Agreement for Scotland;
  
 (b)    the British Grid System
Agreement;
  
 (c)    the
System Operation Agreement; and
  
 (d)    any agreement relating to:

		
		  	 (i)     the establishment of, operation of, or trading of electricity across the
Scottish interconnection;
  
 (ii)    the use of or connection to the Scottish interconnection; and
  
 (iii)   the use of, or connection to, a distribution or transmission system in Scotland.

  

 140 

			
	“running-off”	  	means bringing to an end.
		
	“Scottish interconnection”	  	means such part of the interconnection as is situated in Scotland.
		
	“Scottish licensee”	  	means the holder of a transmission licence at the date that this condition takes effect in this licence but shall not include the system operator.
		
	“Settlement Agreement for Scotland”	  	has the meaning given to it in standard condition B12 (Settlement Agreement for Scotland).
		
	“System Operation Agreement”	  	means the agreement known as the System Operation agreement and made between Scottish Hydro-Electric Plc and Scottish Power Plc and dated 1 June 1990, as amended or modified from time to
time.

  

 141 

 Condition 30C. Not used 
  

 142 

 Condition 31. Not used 
  

 143 

 Condition 31A. Compulsory Acquisition of Land etc. 
  

	1.	The powers and rights conferred by or under the provisions of Schedule 3 to the Act (Compulsory Acquisition of Land etc. by Licence Holders) shall have effect in relation to the
licensee to enable the licensee to carry on the activities authorised by this licence and which: 

  

	 	(a)	are comprised within its distribution business; and 

  

	 	(b)	are carried on within the distribution services area or necessitate the use of the licensee’s distribution system, including any extension of or addition to the licensee’s
distribution system, whether or not connected to such system. 

  

 144 

 Condition 31B. Other Powers etc. 
  

	1.	The powers and rights conferred by or under the provisions of Schedule 4 to the Act (Other Powers etc. of Licence Holders) shall have effect in relation to the licensee to enable
the licensee to carry on the activities authorised by this licence and which: 

  

	 	(a)	are comprised within its distribution business; and 

  

	 	(b)	are carried on within the distribution services area or necessitate the use of the licensee’s distribution system, including any extension of or addition to the licensee’s
distribution system, whether or not connected to such system. 

  

 145 

 SECTION C. DISTRIBUTION SERVICES OBLIGATIONS 
 Condition 32. Definitions of “data transfer catalogue”, “data transfer service” and “permitted purpose” 
  

	1.	In this Section of the standard conditions, unless the context otherwise requires: 

  

			
	“data transfer catalogue”	  	has the meaning given at paragraph 4(c) of standard condition 37 (The Metering Point Administration Service and the Master Registration Agreement).
		
	“data transfer service”	  	means the data transfer service and service facility to be established, operated and maintained by the licensee, in conjunction and co-operation with all other distribution services
providers, in accordance with and comprising the elements set out in standard condition 38 (Establishment of a Data Transfer Service).
		
	“permitted purpose”	  	means the purpose of all or any of the following:

  

	 	(a)	the distribution business or any other business or activity within the limits of paragraph 4 of standard condition 43 (Restriction on Activity and Financial Ring Fencing);

  

	 	(b)	any business or activity to which the Authority has given its consent in writing in accordance with paragraph 3 (d) of condition 43; and 

  

 146 

	 	(c)	without prejudice to the generality of sub-paragraph (a), any payment or transaction lawfully made or undertaken by the licensee for a purpose within sub-paragraphs 1(b)(i) to
(vii) of standard condition 47 (Indebtedness); 

  

 147 

 Condition 32A. Convenience Customers 
  

	1.	The licensee shall establish and maintain an accurate list of any convenience customers. 

  

	2.	The licensee shall update the list referred to in paragraph 1 at least once in every period of 12 months. 

  

 148 

 Condition 33. Not used 
  

 149 

 Condition 34. Not used 
  

 150 

 Condition 35. Not used 
  

 151 

 Condition 36. Requirement to Offer Terms for the Provision of Basic Metering Services 
  

	1.	This condition has effect on and after 1 April 2005. 

  

	2.	Without prejudice to the provisions of paragraph 12, this condition sets out the obligations of the licensee relating to the provision of the services of basic meter asset provision
and basic meter operation (collectively, the “basic metering services”). 

  

	3.	For the purposes of this condition: 

  

	 	(a)	the service of basic meter asset provision comprises the provision (in accordance with the requirements of paragraph 4(a)) of metering equipment (which, at the discretion of the
licensee, may be metering equipment which is owned by him or by any person other than the person making the application under paragraph 6); and 

  

	 	(b)	the services of basic meter operation comprise the installation, commissioning, testing, repair, maintenance, removal and replacement (in each case in accordance with the
requirements of paragraph 4(b)) of metering equipment. 

  

	4.	In relation to the licensee’s discharge of its obligations under conditions 36 to 36D of this licence: 

  

	 	(a)	the service of basic meter asset provision provided pursuant to paragraph 3(a) shall be of the same functionality as that of the service provided pursuant to paragraph 1(a) of
condition 36B (Requirement to Offer Terms for the Provision of Distributor Metering and Data Services) of this licence in the form in which it was in force on 1 June 2003; and 

  

	 	(b)	the services of basic meter operation provided pursuant to paragraph 3(b) shall be of the same standard of performance, quality and timeliness as that of the services provided
pursuant to paragraph 1(b) of condition 36B (Requirement to Offer Terms for the Provision of Distributor Metering and Data Services) of this licence in the form in which it was in force on 1 June 2003. 

  

 152 

	5.	For the purposes of paragraph 4, what is meant in any particular case by “the same functionality” or “the same standard of performance, quality and timeliness”
shall be a question of fact. 

  

	6.	On application made by any person, the licensee shall (subject to paragraph 9): 

  

	 	(a)	where the person making the application is able to establish to the reasonable satisfaction of the licensee that the meters in question are required for use in relation to metering
points within the distribution services area of the licensee, offer to enter into an agreement for providing the service described in paragraph 3(a); 

  

	 	(b)	offer to enter into an agreement for providing within its distribution services area such of the services described in paragraph 3(b) as may be required. 

 

	7.	In making an offer pursuant to this condition to enter into any agreement, the licensee shall set out: 

  

	 	(a)	the date by which the services required will be provided (time being of the essence, unless otherwise agreed between the parties); 

  

	 	(b)	the charges to be paid in respect of the services required, such charges (unless manifestly inappropriate) being: 

  

	 	(i)	presented in such a way as to be referable to the statements prepared in accordance with paragraph 1 of standard condition 36C (Basis of Charges for Basic Metering Services and Data
Services: Requirements for Transparency) or any revision thereof; and 

  

	 	(ii)	set in conformity with the requirements of standard condition 36C (Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency); and

  

 153 

	 	(c)	such other detailed terms in respect of each of the services required as are or may be appropriate for the purposes of the agreement. 

  

	8.	The licensee shall offer terms for agreements in accordance with paragraph 6 as soon as practicable and (except where the Authority consents to a longer period) in any event not
more than 28 days after receipt by the licensee (or its agent) from any person of an application containing all such information as the licensee may reasonably require for the purpose of formulating the terms of the offer. 

 

	9.	The licensee shall not be obliged pursuant to this condition to offer to enter or to enter into any agreement if to do so would be likely to involve the licensee in being:

  

	 	(a)	in breach of its duties under section 9 of the Act; 

  

	 	(b)	in breach either of any regulations made under section 29 of the Act or of any other enactment relating to safety or standards that is applicable in respect of the distribution
business; 

  

	 	(c)	in breach of any Grid Code or Distribution Code; or 

  

	 	(d)	in breach of the conditions. 

  

	10.	The licensee shall undertake each of the services referred to in paragraph 3 in the most efficient and economic manner practicable having regard to the alternatives available and
the other requirements of the licence and of the Act insofar as they relate to the provision of those services. 

  

	11.	In providing any of the services referred to in paragraph 3, the licensee shall not restrict, distort or prevent competition in the supply of electricity. 

 

	12.	Where, in relation to any metering point within the licensee’s distribution services area, a person (including, if that person is a company, an affiliate or a related
undertaking of the company) who is party to an agreement with the licensee for the provision of the services of 

  

 154 

 basic meter asset provision and basic meter operation pursuant to this condition appoints, in accordance
with the provisions of the Master Registration Agreement, a provider other than the licensee of: 
  

	 	(a)	the service described at paragraph 3(a); or 

  

	 	(b)	the services described at paragraph 3(b), 

 notwithstanding
anything in this condition, the licensee shall be under no obligation thereafter to offer to enter into any such agreement with that person for the provision of that service or (as the case may be) those services in relation to that metering point.

  

	13.	An appointment made in accordance with the provisions of the Master Registration Agreement, after 28 June 2004 and before this condition takes effect, of a provider other than
the licensee of any of the services provided pursuant to paragraph 1(a) or (b) of condition 36B (Requirement to Offer Terms for the Provision of Distributor Metering and Data Services) of this licence in the form in which it was in force on
1 June 2003 shall be treated, for the purposes of paragraph 12 of this condition, as an appointment which did not have effect until 1 April 2005. 

  

	14.	For the avoidance of doubt, nothing in this condition: 

  

	 	(a)	affects the continuing obligations of the licensee in respect of the provision of the services of basic meter asset provision and/or basic meter operation for each and every
metering point within its distribution services area at which the circumstances specified in paragraph 12 do not apply; or 

  

	 	(b)	prevents the licensee from offering to enter into and entering into an agreement with any person, whether on the application of that person under paragraph 6 or otherwise, for the
provision of the service of basic meter asset provision or the services of basic meter operation of a functionality or (as the case may be) standard of performance, quality and timeliness higher than that provided previously within the meaning of
paragraph 4. 

  

 155 

	15.	The obligations of the licensee in relation to the provision of: 

  

	 	(a)	the service of basic meter asset provision (except for meters provided prior to 31 March 2007); and 

  

	 	(b)	the services of basic meter operation, 

 pursuant to this
condition shall cease to have effect on 31 March 2007 unless the Authority issues a direction for the purposes of this condition not less than six months before that date that it considers that the cessation of those obligations would be likely
to be detrimental to the interests of consumers. 
  

	16.	For the avoidance of doubt, references to “meter” in this condition and conditions 36A to 36D do not include references to any meter or metering equipment that is
configured to record the quantity of electricity supplied to premises during each half-hour period of supply. 

  

 156 

 Condition 36A. Requirement to Offer Terms for the Provision of Data Services 
  

	1.	The purpose of this condition is to set out the obligations of the licensee relating to the provision of data services. 

  

	2.	For the purposes of this condition, data services comprise:  

  

	 	(a)	metering point administration services pursuant to and in accordance with the provisions of the Master Registration Agreement; and 

  

	 	(b)	data transfer services. 

  

	3.	On application made by any person, the licensee shall (subject to paragraph 7) offer to enter into an agreement for the provision within its distribution services area of metering
point administration services pursuant to and in accordance with the provisions of the Master Registration Agreement. 

  

	4.	On application made by any person, the licensee shall (subject to paragraph 7) offer to enter into an agreement for the provision of data transfer services.

  

	5.	In making an offer pursuant to this condition to enter into any agreement, the licensee shall set out: 

  

	 	(a)	the date by which the services required shall be provided (time being of the essence, unless otherwise agreed between the parties); 

  

	 	(b)	the charges to be paid in respect of the services required, such charges (unless manifestly inappropriate) being: 

  

	 	(i)	presented in such a way as to be referable to the statements prepared in accordance with paragraph 1 of standard condition 36C (Basis of Charges for Basic Metering Services and Data
Services: Requirements for Transparency) or any revision thereof, and 

  

 157 

	 	(ii)	set in conformity with the requirements of standard condition 36C (Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency); and

  

	 	(c)	such other detailed terms in respect of each of the services required as are or may be appropriate for the purposes of the agreement. 

  

	6.	The licensee shall offer terms for agreements in accordance with paragraph 3 and 4 as soon as practicable and (except where the Authority consents to a longer period) in any event
not more than 28 days after receipt by the licensee (or its agent) from any person of an application containing all such information as the licensee may reasonably require for the purpose of formulating the terms of the offer.

  

	7.	The licensee shall not be obliged pursuant to this condition to offer to enter or to enter into any agreement if to do so would be likely to involve the licensee in being:

  

	 	(a)	in breach of its duties under section 9 of the Act; 

  

	 	(b)	in breach either of any regulations made under section 29 of the Act or of any other enactment relating to safety or standards applicable in respect of the distribution business;

  

	 	(c)	in breach of any Grid Code or Distribution Code; or 

  

	 	(d)	in breach of the conditions. 

  

	8.	The licensee shall undertake each of the services referred to in paragraph 2 in the most efficient and economic manner practicable having regard to the alternatives available and
the other requirements of the licence and of the Act insofar as they relate to the provision of those services. 

  

	9.	In the provision of any of the services referred to in paragraph 2, the licensee shall not restrict, distort or prevent competition in the supply of electricity.

  

 158 

	10.	The services referred to in paragraph 2 shall collectively be referred to as the data services. For the avoidance of doubt, data services as referred to in this licence exclude the
services of data aggregation, data processing and data retrieval. 

  

	11.	In this condition: 

  

			
	“data aggregation”	  	 means services comprising any or all of the following:
  
 the collation and summation of meter reading data (whether actual or estimated) and of data in respect of the consumption of electricity at premises which receive an
unmetered supply, and the delivery of such data to any person for settlement purposes.

		
	“data processing”	  	 means services comprising any or all of the following:
  
 the processing, validation and estimation of meter reading data, and the creation, processing and validation of data in respect of the consumption of electricity at
premises which receive an unmetered supply, and the delivery of such data to any person for the purpose of data aggregation.

		
	“data retrieval”	  	means services comprising any or all of the following: the retrieval and verification of meter reading data from electricity meters and the delivery of such data to any person for the
purpose of data processing.

  

 159 

 Condition 36B. Non-Discrimination in the Provision of Basic Metering Services and Data Services 
  

	1.	In providing any of the basic metering services and data services, the licensee shall not discriminate between any persons or class or classes of person. 

 

	2.	Without prejudice to paragraph 1, and subject to the provisions of standard condition 36C (Basis of Charges for Basic Metering Services and Data Services: 

Requirements for Transparency), the licensee shall not make charges for providing any of the basic metering services and data services to any person or
class or classes of person which differ from the charges for such provision to any other person or class or classes of person except insofar as such differences reasonably reflect differences in the costs associated with such provision. 

 

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 Condition 36C. Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency

  

	1.	The licensee shall as soon as practicable prepare statements in a form approved by the Authority setting out the basis upon which charges will be made for the provision of each of
the basic metering services and data services, in each case in such form and with such detail as shall be necessary to enable any person to make a reasonable estimate of the charges which the person would become liable to pay for the provision of
such services and of the other terms, likely to have a material impact on the conduct of the person’s business, upon which the service would be provided and (without prejudice to the foregoing) including the information required under paragraph
2. 

  

	2.	The statements referred to at paragraph 1 shall include a schedule of charges for each of the basic metering services and data services, together with an explanation of the methods
by which and the principles on which such charges will be calculated. 

  

	3.	The Authority may, upon the written request of the licensee, issue a direction relieving the licensee of its obligations under paragraph 1 to such extent and subject to such terms
and conditions as the Authority may specify in that direction. 

  

	4.	The licensee shall not in setting its charges for, or in setting the other terms that will apply to, the provision of any of the basic metering services and data services, restrict,
distort or prevent competition in the generation, distribution or supply of electricity or in the provision of meter equipment, meter maintenance or data retrieval services. 

  

	5.	The licensee: 

  

	 	(a)	shall, at least once in every year, review the information set out in the statements prepared in accordance with paragraph 1 in order to ensure that the information set out in them
continues to be accurate in all material respects; and 

  

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	 	(b)	may, with the approval of the Authority, from time to time alter the form of such statements. 

  

	6.	The licensee shall send a copy of any statement prepared in accordance with paragraph 1, and of each revision of such statement, to the Authority. 

  

	7.	The licensee shall give or send a copy of any statement prepared in accordance with paragraph 1, or (as the case may be) of the latest revision of such statement, to any person who
requests a copy. 

  

	8.	The licensee may make a charge for any statement given or sent pursuant to paragraph 7 of an amount which shall not exceed the amount specified in directions issued by the Authority
for the purposes of this condition based on the Authority’s estimate of the licensee’s reasonable costs of providing such statement. 

  

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 Condition 36D. Provision of Basic Metering and Data Services – Functions of the Authority 
  

	1.	If, after a period which appears to the Authority to be reasonable for the purpose, the licensee has failed to enter into an agreement with any person entitled or claiming to be
entitled thereto pursuant to a request under standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services) or standard condition 36A (Requirement to Offer Terms for the Provision of Data Services), the Authority
may, on the application of such person or the licensee, settle any terms of the agreement in dispute between the licensee and that person in such manner as appears to the Authority to be reasonable, having (insofar as relevant) regard in particular
to the following considerations: 

  

	 	(a)	that the performance by the licensee of its obligations under the agreement should not cause it to be in breach of those provisions referred to at paragraph 9 of standard condition
36 (Requirement to Offer Terms for the Provision of Basic Metering Services) or paragraph 6 of standard condition 36A (Requirement to Offer Terms for the Provision of Data Services); and 

  

	 	(b)	that the terms and conditions of the agreement so settled by the Authority and of any other agreements entered into by the licensee pursuant to a request under standard condition 36
(Requirement to Offer Terms for the Provision of Basic Metering Services) and standard condition 36A (Requirement to Offer Terms for the Provision of Data Services) should be in as similar a form as is practicable. 

  

	2.	Insofar as any person entitled or claiming to be entitled to an offer under standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services) and
condition 36A (Requirement to Offer Terms for the Provision of Data Services) wishes to proceed on the basis of the agreement as settled by the Authority pursuant to paragraph 1, the licensee shall forthwith enter into and implement such agreement
in accordance with its terms. 

  

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	3.	If either party to such agreement proposes to vary the contractual terms of any agreement for the provision of any of the basic metering services or data services entered into
pursuant to standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services) or standard condition 36A (Requirement to Offer Terms for the Provision of Data Services) or this condition in any manner provided for under
such agreement, the Authority may, at the request of that party, settle any dispute relating to such variation in such manner as appears to the Authority to be reasonable. 

  

	4.	The Authority may (following consultation with the licensee) issue a direction relieving the licensee of its obligations under standard condition 36 (Requirement to Offer Terms for
the Provision of Basic Metering Services) or standard condition 36A (Requirement to Offer Terms for the Provision of Data Services) relating to basic metering services or data services in respect of such parts of that condition and to such extent as
may be specified in the direction. 

  

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 Condition 37. The Metering Point Administration Service and the Master Registration Agreement 
  

	1.	The Metering Point Administration Service shall, where so requested, fulfil within the distribution services area the functions set out in standard condition 14 (Provision of the
Metering Point Administration Service and Compliance with the Master Registration Agreement) in respect of all Premises connected to another distribution system within the distribution services area. 

  

	2.	The licensee shall use its best endeavours, in conjunction and co-operation with all other distribution services providers, to prepare and maintain a form of agreement to be known
as the Master Registration Agreement. 

  

	3.	The Master Registration Agreement shall be an agreement made between: 

  

	 	(a)	on the one part, the licensee and all other licensed distributors; and 

  

	 	(b)	on the other part: 

  

	 	(i)	all electricity suppliers (or their agents) which require the provision of metering point administration services from at least one licensed distributor; and

  

	 	(ii)	such other persons as are, for settlement purposes, appropriate parties to the agreement. 

  

	4.	The Master Registration Agreement shall comprise: 

  

	 	(a)	terms for the provision of metering point administration services in accordance with the requirements of paragraph 3 of standard condition 14 (Provision of the Metering Point
Administration Service and Compliance with the Master Registration Agreement) and the equivalent requirements in the distribution licences of all other licensed distributors; 

  

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	 	(b)	provisions to facilitate, and procedures and practices to be followed by electricity suppliers in relation to changes of electricity supplier in respect of any premises;

  

	 	(c)	a catalogue of definitions, flows and forms of such data as may require to be transferred by or to parties to the Master Registration Agreement, or as between any persons for
settlement purposes or for any related purposes (the “data transfer catalogue”); 

  

	 	(d)	arrangements for the variation of the Master Registration Agreement following consultation with the parties, or representatives of the parties, to that agreement;

  

	 	(e)	provisions (which shall require to be approved in advance by the Authority) by virtue of which the whole or specified parts of the Master Registration Agreement shall not be capable
of variation without the prior approval of the Authority; and 

  

	 	(f)	such other matters as are or may be appropriate for the development, maintenance and operation of an efficient, co-ordinated and economical system for the supply of electricity and
for the purpose of facilitating competition in electricity supply. 

  

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 Condition 38. Establishment of a Data Transfer Service 
  

	1.	The licensee shall use its best endeavours, in conjunction and co-operation with all other distribution services providers: 

  

	 	(a)	to establish, or to procure the establishment of, a service to be known as the data transfer service; and 

  

	 	(b)	subsequently to operate and maintain, or to procure the subsequent operation and maintenance of, such data transfer service in accordance with the provisions of this condition.

  

	2.	The data transfer service shall: 

  

	 	(a)	provide a network over which may be made all of the electronic data transfers specified at paragraph 3; 

  

	 	(b)	operate and maintain that network; and 

  

	 	(c)	provide a connection to that network, on request, to any person who is or will be a party to any of the electronic data transfers specified at paragraph 3. 

 

	3.	The electronic data transfers specified at this paragraph are those which are reasonably required for any of the purposes set out at paragraph 4 and which are made between:

  

	 	(a)	a Metering Point Administration Service operator and an electricity supplier or any agent thereof; 

  

	 	(b)	a Metering Point Administration Service operator and any person identified in the Balancing and Settlement Code or the Settlement Agreement for Scotland as an appropriate person for
the receipt of data from the Metering Point Administration Service operator for settlement purposes; 

  

	 	(c)	a transmission licensee (or any agent thereof) or Scottish Electricity Settlements Limited or its successor in title (or any agent thereof) and an electricity supplier (or any agent
thereof); 

  

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	 	(d)	an electricity supplier (or any agent thereof) and another electricity supplier (or any agent thereof); 

  

	 	(e)	an electricity supplier and any of its agents; 

  

	 	(f)	different agents of the same electricity supplier; 

  

	 	(g)	electricity suppliers (or their agents) and generators (or their agents) which are parties to the Settlement Agreement for Scotland; and 

  

	 	(h)	Scottish Electricity Settlements Limited or its successor in title (or any agent thereof) and any person (or any agent thereof) who is a party to or complies with the Settlement
Agreement for Scotland. 

  

	4.	The purposes of this paragraph are to: 

  

	 	(a)	meet obligations with respect to the transfer of data for settlement purposes; 

  

	 	(b)	communicate meter reading and meter standing data; 

  

	 	(c)	facilitate the provision of metering point administration services; 

  

	 	(d)	communicate distribution use of system information; and 

  

	 	(e)	fulfil such other requirements relating to the transfer of data as may be requisite for the supply of electricity to customers and compliance by electricity suppliers with the
Master Registration Agreement. 

  

	5.	The data transfer service shall, where relevant, transmit data in a form which complies with the provisions of the data transfer catalogue. 

  

	6.	In fulfilling its obligations under paragraph 1 the licensee shall not, or (if appropriate) shall ensure that any third party acting on the licensee’s instruction or behalf
shall not, restrict, distort or prevent competition in the provision of meters, meter maintenance, data retrieval, data processing, data aggregation or prepayment meter services and markets for any of the distributor metering and data services.

  

 168 

	7.	Any obligation placed on the licensee under standard conditions 36A to 36C in respect of the provision of the data transfer service shall (for the purposes of those conditions) be
treated as a requirement on the licensee to use its best endeavours, in conjunction and co-operation with all other distribution services providers, to fulfil that obligation or to procure the fulfilment of that obligation by a third party, and
standard conditions 36A to 36C shall apply mutatis mutandis to the provision of data transfer services by the distribution services providers acting co-operatively and by means of procurement of third party services. 

 

	8.	Further, in relation to the provision of data transfer services the reference at paragraph 1 of standard condition 36C (Functions of the Authority) to the licensee failing to enter
into an agreement shall be a reference to the licensee, in conjunction with all other distribution services providers, failing to enter into, or failing to procure that a third party enters into, an agreement for the provision of those services.

  

	9.	In this condition: 

  

			
	“Metering Point Administration Service operator”	  	means the licensee or any other distribution services provider in its capacity as a provider of metering point administration services.

  

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 Condition 39. Restriction on Use of Certain Information and Independence of the Distribution Business 

 

	1.	In this Condition and in Condition 40: 

 “Confidential
information” means information relating to, or derived from, the distribution business which is not published or otherwise legitimately in the public domain; and 
 “Relevant supplier or shipper” means the holder of an electricity or gas supply licence or a gas shipper’s licence, which is an affiliate or related undertaking of the licensee. 
  

	2.	The Licensee shall put in place and at all times maintain managerial and operational systems which prevent any relevant supplier or shipper from having access to confidential
information except and to the extent that such information: 

  

	 	(a)	is made available on an equal basis to any gas or electricity supplier or gas shipper; or 

  

	 	(b)	appertains to a customer who at the time to which the information relates was a customer of the relevant supplier; or 

  

	 	(c)	is of a type that has been confirmed by the Authority in writing as corporate. 

  

	3.	The Licensee shall at all times manage and operate the Distribution Business in a way calculated to ensure that it does not restrict, prevent or distort competition in the supply of
electricity or gas or the shipping of gas or the generation of electricity. 

  

	4.	Unless otherwise directed by the Authority, the Licensee shall no later than 31 May 2002 have in place a statement (in this Condition “the statement”), approved by
the Authority, describing the practices, procedures and systems which the licensee has adopted (or intends to adopt) to secure compliance with paragraphs 2 and 3. 

  

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	5.	Where the Authority does not indicate otherwise within 60 days of receipt of the statement, the statement shall be deemed to be approved by the Authority. 

 

	6.	The statement shall in particular (but without prejudice to the generality of paragraphs 2 and 3) set out how the Licensee shall: 

  

	 	(a)	maintain the full managerial and operational independence of the Distribution Business from any relevant supplier or shipper; 

  

	 	(b)	maintain the branding of the distribution business so that it is fully independent from the branding used by any relevant supplier or shipper; 

  

	 	(c)	secure that any arrangements for the use of or access to: 

  

	 	(i)	premises or parts of premises occupied by persons engaged in, or in respect of, the management or operation of the Distribution Business; 

  

	 	(ii)	systems for the recording, processing or storage of data to which persons engaged in, or in respect of, the management or operation of the Distribution Business also have access;

  

	 	(iii)	equipment, facilities or property employed for the management or operation of the Distribution Business; or 

  

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	 	(iv)	the services of persons who are (whether or not as their principal occupation) engaged in, or in respect of, the management or operation of the Distribution Business;

 by any relevant supplier or shipper or by any person engaged in or in respect of the activities of such a relevant supplier
or shipper shall be such as to prevent any breach of the requirements of those paragraphs; and 
  

	 	(d)	manage the transfer of employees from the Distribution Business to any relevant supplier or shipper. 

  

	7.	The Licensee may, with the approval of the Authority, revise the statement prepared in accordance with paragraph 4. 

  

	8.	The Licensee shall take all reasonable measures to ensure compliance with the terms of the statement as from time to time revised by the Licensee and approved by the Authority.

  

	9.	The Licensee shall publish a copy of the approved statement prepared in accordance with paragraph 4 (or the latest approved revision) on its company’s website within fifteen
working days of its approval by the Authority. 

  

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 Condition 40. Appointment of Compliance Officer 
  

	1.	The Licensee shall ensure, following consultation with the Authority that a competent person (who shall be known as the “compliance officer”) shall be appointed for the
purpose of facilitating compliance by the Licensee with standard condition 39, and, insofar as they relate to relationships with relevant suppliers and shippers, standard condition 41 and Paragraph 1 of standard conditions 4A and 36B (together,
“the relevant duties”). 

  

	2.	The Licensee shall at all times ensure that the compliance officer is engaged for the performance of such duties and tasks as the Licensee considers it appropriate to assign to him
for the purposes specified at paragraph 1, which duties and tasks shall include those set out at paragraph 5. 

  

	3.	The Licensee shall procure that the compliance officer: 

  

	 	(a)	is provided with such staff, premises, equipment, facilities and other resources; and 

  

	 	(b)	has such access to the Licensee’s premises, systems, information and documentation 

 as, in each case, he might reasonably expect to require for the fulfilment of the duties and tasks assigned to him. 
  

	4.	The Licensee shall make available to the compliance officer a copy of any complaint or representation received by it from any person in respect of a matter arising under or by
virtue of those standard conditions and parts of standard conditions specified in paragraph 1. 

  

	5.	The duties and tasks assigned to the compliance officer shall include: 

  

	 	(a)	providing relevant advice and information to the Licensee for the purpose of facilitating its compliance with the relevant duties; 

  

 173 

	 	(b)	monitoring the effectiveness of the practices, procedures and systems adopted by the Licensee in accordance with the statement referred to at paragraph 4 of standard condition 39;

  

	 	(c)	advising whether, to the extent that the implementation of such practices, procedures and systems requires the co-operation of any other person, they are designed so as reasonably
to admit of the required co-operation; 

  

	 	(d)	investigating any complaint or representation made available to him in accordance with paragraph 4; 

  

	 	(e)	recommending and advising upon the remedial action which any such investigation has demonstrated to be necessary or desirable; 

  

	 	(f)	providing relevant advice and information to the Licensee for the purpose of ensuring its effective implementation of: 

  

	 	(i)	the practices, procedures and systems adopted in accordance with the statement referred to at paragraph 4 of standard condition 39; and 

  

	 	(ii)	any remedial action recommended in accordance with sub-paragraph (e); and 

  

	 	(g)	reporting annually to the directors of the Licensee - in respect of each year after this standard condition comes into force—as to his activities during the period covered by
the report, including the fulfilment of the other duties and tasks assigned to him by the Licensee. 

  

	6.	As soon as is reasonably practicable following each annual report of the compliance officer, the Licensee shall produce a report: 

  

	 	(a)	as to its compliance during the relevant year with the relevant duties; and 

  

	 	(b)	as to its implementation of the practices, procedures and systems adopted in accordance with the statement referred to at paragraph 4 of standard condition 39.

  

	7.	The report produced in accordance with paragraph 6 shall in particular: 

  

	 	(a)	detail all activities of the compliance officer during the relevant year; 

  

 174 

	 	(b)	refer to such other matters as are or may be appropriate in relation to the implementation of the practices, procedures and systems adopted in accordance with the statement referred
to at paragraph 4 of standard condition 39; and 

  

	 	(c)	set out the details of any investigations conducted by the compliance officer, including: 

  

	 	(i)	the number, type and source of the complaints or representations on which such investigations were based; 

  

	 	(ii)	the outcome of such investigations; and 

  

	 	(iii)	any remedial action taken by the Licensee following such investigations. 

  

	8.	The Licensee shall submit to the Authority a copy of the report produced in accordance with paragraph 6, and shall publish the report on its website. 

  

 175 

 Condition 41. Prohibition of Cross-Subsidies 
  

	1.	The licensee shall procure that the distribution business shall not give any cross-subsidy to, or receive any cross-subsidy from, any other business of the licensee or of an
affiliate or related undertaking of the licensee. 

  

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 Condition 42. Regulatory Accounts 
 Part A: Application and purpose 
  

	1.	This condition applies for the purposes of ensuring: 

  

	 	(a)	that the licensee prepares and publishes regulatory accounts within the meaning of paragraph 3(b); and 

  

	 	(b)	that the licensee maintains (and secures that any affiliate or related undertaking of the licensee maintains) such accounting records, other records and reporting arrangements as
are necessary to enable the licensee to comply with that obligation. 

 Part B: Preparation of accounts 
  

	2.	For the purposes of this condition, but without prejudice to paragraph 4, the licensee must prepare regulatory accounts for each financial year ending on 31 March.

  

	3.	Unless the Authority otherwise consents, the licensee must: 

  

	 	(a)	Keep or cause to be kept for a period approved by the Authority, but not less than the period referred to in section 222(5)(b) of the Companies Act 1985 and in the manner referred
to in that section, such accounting records and other records as are necessary so that the revenues, costs, assets, liabilities, reserves, and provisions of, or reasonably attributable to, each of the distribution business activities of the licensee
are separately identifiable in the accounting records of the licensee (and of any affiliate or related undertaking of the licensee); and 

  

	 	(b)	prepare, on a consistent basis from such accounting records in respect of each financial year, regulatory accounts of the licensee comprising: 

  

	 	(i)	a profit and loss account (or, as appropriate, an income statement); 

  

 177 

	 	(ii)	a statement of total recognised gains and losses (or, as appropriate, a statement of changes in equity and if appropriate a statement of recognised income and expense);

  

	 	(iii)	a balance sheet; 

  

	 	(iv)	a cash flow statement; 

  

	 	(v)	a corporate governance statement; 

  

	 	(vi)	a directors’ report; and 

  

	 	(vii)	an operating and financial review, 

 together with notes
thereto and statements of the accounting policies adopted. 
  

	4.	Regulatory accounts in respect of a financial year prepared under paragraph 3(b) shall, so far as reasonably practicable and unless otherwise approved by the Authority having regard
to the purposes of this condition, have the same content and format as the most recent or concurrent statutory accounts of the licensee prepared under sections 226 and 226A or, where appropriate, section 226B of the Companies Act 1985 and shall
comply with all relevant accounting and reporting standards currently in force which have been issued or adopted by the Accounting Standards Board or, if the regulatory accounts have been prepared under section 226B of the Companies Act 1985, by the
International Accounting Standards Board. 

 Part C: Audit and delivery of accounts 
  

	5.	Unless the Authority otherwise consents, the licensee must: 

  

	 	(a)	procure, in relation to its regulatory accounts 

  

	 	(i)	an audit by an appropriate auditor of such parts of those accounts and the directors’ report and operating and financial review as are specified in the Companies Act 1985 as
being required to be so audited as if the licensee were a quoted company and they were the statutory accounts of the licensee prepared under sections 226 and 226A or, as appropriate, section 226B of the Companies Act 1985 drawn up to 31 March,
and 

  

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	 	(ii)	a report by that auditor, addressed to the Authority, stating whether in the auditor’s opinion those accounts fairly present the financial position, financial performance and
cash flows of the licensee in accordance with the requirements of this condition; and 

  

	 	(b)	deliver to the Authority those accounts and the auditor’s reports referred to in paragraph 5(a)(ii) and paragraph 6 as soon as is reasonably practicable, and in any event prior
to their publication under Part D and not later than 31 July following the end of the financial year to which the regulatory accounts relate. 

  

	6.	The licensee shall take all appropriate steps within its power to procure, in relation to its regulatory accounts: 

  

	 	(a)	that the audit referred to in paragraph 5(a)(i) verifies whether the obligation to avoid discrimination and cross-subsidies specified in Article 19 of Directive 2003/54/EC of the
European Parliament and of the European Council of 26 June 2003 has been respected by the licensee; and 

  

	 	(b)	that the appropriate auditor reports separately on that matter from his report under paragraph 5(a)(ii) addressed to the Authority. 

  

	7.	For the purposes of paragraphs 5 and 6, the licensee must, at its own expense, enter into a contract of appointment with an appropriate auditor which includes a term requiring that
the audit of the regulatory accounts of the licensee must be conducted by that auditor in accordance with all such relevant auditing standards in force on the last day of the financial year to which the audit relates as would be appropriate for
accounts prepared in accordance with either section 226A or 226B of the Companies Act 1985. 

  

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	8.	In this Part C, “appropriate auditor” means: 

  

	 	(a)	in the case of a licensee which is a company within the meaning of section 735 of the Companies Act 1985, a person appointed as auditor under Chapter V of Part XI of that Act;

  

	 	(b)	in the case of any other licensee which is required by the law of a country or territory within the European Economic Area to appoint an auditor under provisions analogous to
Chapter V of Part XI of that Act, a person so appointed; and 

  

	 	(c)	in any other case, a person who is eligible for appointment as a company auditor under sections 25 and 26 of the Companies Act 1989. 

 Part D: Publication of regulatory accounts 
  

	9.	Unless the Authority otherwise directs, after consulting the licensee, the licensee must publish its regulatory accounts: 

  

	 	(a)	as a stand-alone document in accordance with this condition; 

  

	 	(b)	by 31 July following the end of the financial year to which the accounts relate; 

  

	 	(c)	on a website used by the licensee in its ordinary course of business (where the regulatory accounts should be reasonably accessible to any person requiring them); and

  

	 	(d)	in any other manner which, in the opinion of the licensee, is necessary to secure adequate publicity for the accounts. 

  

	10.	A copy of the regulatory accounts must be provided free of charge: 

  

	 	(a)	to the Consumer Council no later than the date on which the accounts are published; and 

  

	 	(b)	to any person requesting a copy. 

  

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 Part E: Interpretation 
  

	11.	References in this condition to sections of the Companies Act 1985 are references to those provisions as amended, substituted or inserted by the relevant provisions of the Companies
Act 1989, and if such provisions of the Companies Act 1989 are not in force at the date on which this condition takes effect, it must be construed as if such provisions were in force at such date. 

  

	12.	A consent under paragraph 3, 4 or 5 may be given in relation to some or all of the requirements of the relevant paragraph and subject to such conditions as the Authority considers
appropriate or necessary having regard to the purposes of this condition. 

  

	13.	In this condition: 

  

	 	(a)	“corporate governance statement” means a statement which describes how the principles of good corporate governance have been applied to the licensee and which a quoted
company is required to prepare pursuant to the Combined Code on Corporate Governance issued under the Financial Services Authority’s listing rules and interpretations on corporate governance (and, for the purposes of this condition, the
requirement for a quoted company to prepare such a statement is to be taken as a requirement for the licensee to do so whether or not it is a quoted company). 

  

	 	(b)	“directors’ report” means a report having the coverage and content of the directors’ report which a quoted company is required to prepare pursuant to sections
234, 234ZZA and 234ZZB of the Companies Act 1985 (and, for the purposes of this condition, the requirement for a quoted company to prepare such a report is to be taken as a requirement for the licensee to do so whether or not it is a quoted
company). 

  

	 	(c)	“operating and financial review” means a review having the coverage and content of the operating and financial review which a quoted company is required to prepare
pursuant to section 234AA of the Companies Act 1985 and in accordance with Schedule 7ZA thereof (and, for the purposes of this condition, the requirement for a quoted company to prepare such a review is to be taken as a requirement for the licensee
to do so whether or not it is a quoted company). 

  

	 	(d)	“quoted company” has the meaning attributed to it by the Companies Act 1985. 

  

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 Condition 42A. Change of Financial Year 
  

	1.	The definition of “financial year” in standard condition 1 (Definitions and Interpretation) shall, for the purpose only of the statutory accounts of the licensee, cease to
apply to the licensee from the date at which the licensee sends a notice to the Authority for that purpose. 

  

	2.	Such notice shall: 

  

	 	(a)	specify the date from which, for the purpose set out at paragraph 1, the current and subsequent financial years of the licensee shall run; and 

  

	 	(b)	continue in effect until revoked by the licensee issuing a further notice. 

  

	3.	The licensee may, for the purpose only of its statutory accounts, change its financial year from that previously notified by sending to the Authority a new notice pursuant to
paragraph 1 which specifies the licensee’s new financial year end. 

  

	4.	Where the licensee sends the Authority a new notice, the previous notice shall be revoked, as provided by paragraph 2(b), and the licensee’s financial year-end shall change
with effect from the date specified in the new notice. 

  

	5.	The provisions of this condition shall not: 

  

	 	(a)	apply to the financial year of the licensee as defined in standard condition 1 (Definitions and Interpretation) for the purpose of accounts or other information produced in
compliance with standard conditions 42 (Regulatory Accounts), 50 (Price Control Revenue Reporting and Associated Information) and 52 (Price Control Review Information); or 

  

	 	(b)	affect the licensee’s obligations in respect of the payment of licence fees under standard condition 3 (Payments by Licensee to the Authority). 

  

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 Condition 43. Restriction on Activity and Financial Ring Fencing 
  

	1.	Save as provided by paragraphs 3 and 4, the licensee shall not conduct any business or carry on any activity other than the distribution business. 

  

	2.	The licensee shall not without the prior written consent of the Authority hold or acquire shares or other investments of any kind except: 

  

	 	(a)	shares or other investments in a body corporate the sole activity of which is to carry on business for a permitted purpose; 

  

	 	(b)	shares or other investments in a body corporate which is a subsidiary of the licensee and incorporated by it solely for the purpose of raising finance for the distribution business;
or 

  

	 	(c)	investments acquired in the usual and ordinary course of the licensee’s treasury management operations, subject to the licensee maintaining in force, in relation to those
operations, a system of internal controls which complies with best corporate governance practice as required (or, in the absence of any such requirement, recommended) by the UK listing authority (or a successor body) from time to time for listed
companies in the United Kingdom. 

  

	3.	Subject to the provisions of paragraph 2, nothing in this condition shall prevent: 

  

	 	(a)	any affiliate in which the licensee does not hold shares or other investments from conducting any business or carrying on any activity; 

  

	 	(b)	the licensee from holding shares as, or performing the supervisory or management functions of, an investor in respect of any body corporate in which it holds an interest consistent
with the provisions of this licence; 

  

	 	(c)	the licensee from performing the supervisory or management functions of a holding company in respect of any subsidiary; or 

  

	 	(d)	the licensee from carrying on any business or conducting any activity to which the Authority has given its consent in writing. 

  

 183 

	4.	Nothing in this condition shall prevent the licensee or an affiliate or related undertaking of the licensee in which the licensee holds shares or other investments (a “relevant
associate”) from conducting de minimis business as defined in this paragraph so long as the limitations specified in this paragraph are complied with. 

  

	 	(a)	For the purpose of this paragraph, “de minimis business” means any business or activity carried on by the licensee or a relevant associate or relevant associates other
than: 

  

	 	(i)	the distribution business; and 

  

	 	(ii)	any other business activity to which the Authority has given its consent in writing in accordance with paragraph 3(d). 

  

	 	(b)	The licensee or a relevant associate may carry on de minimis business provided that neither of the following limitations is exceeded, namely: 

  

	 	(i)	the aggregate turnover of all the de minimis business carried on by the licensee and the equity share of the aggregate turnover of all the de minimis business carried on by all its
relevant associates does not in any period of twelve months commencing on 1 April of any year exceed 2.5 per cent of the aggregate turnover of the distribution business as shown by the most recent audited regulatory accounts of the
licensee produced under paragraph 3(b) of standard condition 42 (Regulatory Accounts); and 

  

	 	(ii)	the aggregate amount (determined in accordance with subparagraph (d) below) of all investments made by the licensee in de minimis business, carried on by the licensee and all
relevant associates, does not at any time after the date at which this condition takes effect in this licence exceed 2.5 per cent of the sum of the share capital in issue, the share premium and the consolidated reserves (including retained
earnings) of the licensee as shown by the most recent audited regulatory accounts of the licensee produced under paragraph 3(b) of standard condition 42 (Regulatory Accounts) then available. 

  

 184 

	 	(c)	For the purpose of sub-paragraph (b) above, “investment” means any form of financial support or assistance given by or on behalf of the licensee for the de minimis
business whether on a temporary or permanent basis and including (without limiting the generality of the foregoing) any commitment to provide any such support or assistance in the future. 

  

	 	(d)	At any relevant time, the amount of an investment shall be the sum of: 

  

	 	(i)	the value at which such investment was included in the audited historical cost balance sheet of the licensee as at its latest accounting reference date to have occurred prior to
1 October 2001 (or, where the investment was not so included, zero); 

  

	 	(ii)	the aggregate gross amount of all expenditure (whether of a capital or revenue nature) howsoever incurred by the licensee in respect of such investment in all completed accounting
reference periods since such accounting reference date; and 

  

	 	(iii)	all commitments and liabilities (whether actual or contingent) of the licensee relating to such investment outstanding at the end of the most recently completed accounting reference
period, 

 less the sum of the aggregate gross amount of all income (whether of a capital or revenue nature) howsoever received
by the licensee in respect of such investment in all completed accounting reference periods since the accounting reference date referred to in paragraph 4(d)(i). 
  

	5.	For the purposes of paragraph 4, “equity share”, in relation to any shareholding, means the nominal value of the equity shares held by the licensee in a relevant
associate, as a percentage of the nominal value of the entire issued equity share capital of that relevant associate. 

  

 185 

 Condition 44. Availability of Resources 
  

	1.	The licensee shall at all times act in a manner calculated to secure that it has available to itself such resources, including (without limitation) management and financial
resources, personnel, fixed and moveable assets, rights, licences, consents and facilities, on such terms and with all such rights, as shall ensure that it is at all times able: 

  

	 	(a)	to properly and efficiently carry on the distribution business; and 

  

	 	(b)	to comply in all respects with its obligations under this licence and such obligations under the Act as apply to the distribution business including, without limitation, its duty to
develop and maintain an efficient, coordinated and economical system of electricity distribution. 

  

	2.	The licensee shall by 31 July of each year submit to the Authority a certificate, approved by a resolution of the board of directors of the licensee and signed by a director of
the licensee pursuant to that resolution, in one of the following forms: 

  

	 	(a)	“After making enquiries, and having taken into account in particular (but without limitation) any dividend or other distribution which might reasonably be expected to be
declared or paid by the licensee, the directors of the licensee have a reasonable expectation that the licensee will have sufficient financial resources and financial facilities available to itself to enable the licensee to carry on the distribution
business for a period of 12 months from the date of this certificate.” 

  

	 	(b)	“After making enquiries, and having taken into account in particular (but without limitation) any dividend or other distribution which might reasonably be expected to be
declared or paid by the licensee, the directors of the licensee have a reasonable expectation, subject to what is explained below, that the licensee will have sufficient financial resources and financial facilities available to itself to enable the
licensee to carry on the distribution business for a period of 12 months from the date of this certificate. However, they would like to draw attention to the following factors which may cast doubt on the ability of the licensee to carry on the
distribution business.” 

  

 186 

	 	(c)	“In the opinion of the directors of the licensee, the licensee will not have sufficient financial resources and financial facilities available to itself to enable the licensee
to carry on the distribution business for a period of 12 months from the date of this certificate.” 

  

	3.	The licensee shall submit to the Authority with that certificate a statement of the main factors which the directors of the licensee have taken into account in giving the
certificate, together with a confirmation of the availability of financial facilities and a working capital statement in the format required by the UK listing authority (or a successor body) from time to time for listed companies in the United
Kingdom. 

  

	4.	The statement submitted to the Authority in accordance with paragraph 3 shall be approved by a resolution of the board of directors of the licensee and must be signed by a director
of the licensee pursuant to that resolution. 

  

	5.	The licensee shall inform the Authority in writing immediately if the directors of the licensee become aware of any circumstance which causes them no longer to have the reasonable
expectation expressed in the most recent certificate given under paragraph 2. 

  

	6.	The licensee shall require that each certificate provided for in paragraph 2 is accompanied by a report prepared by its auditors and addressed to the Authority stating whether or
not the auditors are aware of any inconsistencies between, on the one hand, that certificate and the statement submitted with it and, on the other hand, any information which they obtained during their audit work on the regulatory accounts of the
licensee prepared pursuant to standard condition 42 (Regulatory Accounts). 

  

	7.	The directors of the licensee shall not declare or recommend a dividend, and the licensee shall not make any other form of distribution within the meaning of section 263 of
the Companies Act 1985, or redeem or repurchase any share capital of the licensee unless prior 

  

 187 

 to the declaration, recommendation or making of the distribution (as the case may be) the licensee has
issued to the Authority a certificate complying with the following requirements of this paragraph: 
  

	 	(a)	The certificate shall be in the following form: 

 “After making enquiries, the directors of the licensee are satisfied: 
  

	 	(i)	that the licensee is in compliance in all material respects with all obligations imposed on it by standard condition 24 (Provision of Information to the Authority), standard
condition 43 (Restriction on Activity and Financial Ring Fencing), standard condition 44 (Availability of Resources), standard condition 45 (Undertaking from Ultimate Controller), standard condition 46 (Credit Rating of the Licensee) and standard
condition 47 (Indebtedness) of its licence; and 

  

	 	(ii)	that the making of a distribution of [ ] on [ ] will not, either alone or when taken together with other circumstances reasonably foreseeable at the date of this certificate, cause
the licensee to be in breach to a material extent of any of those obligations in the future.” 

  

	 	(b)	The certificate shall be signed by a director of the licensee and must have been approved by a resolution of the board of directors of the licensee passed not more than 14 days
before the date on which the declaration, recommendation or payment will be made. 

  

	 	(c)	Where the certificate has been issued in respect of the declaration or recommendation of a dividend, the licensee shall be under no obligation to issue a further certificate prior
to payment of that dividend, provided that such payment is made within six months of the issuing of that certificate. 

  

 188 

 Condition 45. Undertaking from Ultimate Controller 
  

	1.	The licensee shall procure from each company or other person which the licensee knows or reasonably should know is at any time an ultimate controller of the licensee a legally
enforceable undertaking in favour of the licensee in the form specified by the Authority that that ultimate controller (“the covenantor”) will refrain from any action, and will procure that any person (including, without limitation, a
corporate body) which is a subsidiary of, or is controlled by, the covenantor (other than the licensee and its subsidiaries) will refrain from any action, which would then be likely to cause the licensee to breach any of its obligations under the
Act or this licence. Such undertaking shall be obtained within 7 days of the company or other person in question becoming an ultimate controller and shall remain in force for as long as the licensee remains the holder of this licence and the
covenantor remains an ultimate controller of the licensee. 

  

	2.	The licensee shall: 

  

	 	(a)	deliver to the Authority evidence (including a copy of each such undertaking) that the licensee has complied with its obligation to procure undertakings pursuant to paragraph 1;

  

	 	(b)	inform the Authority immediately in writing if the directors of the licensee become aware that any such undertaking has ceased to be legally enforceable or that its terms have been
breached; and 

  

	 	(c)	comply with any direction from the Authority to enforce any such undertaking; 

 and shall not, save with the consent in writing of the Authority, enter (directly or indirectly) into any agreement or arrangement with any ultimate controller of the licensee or of any of the subsidiaries of any such
corporate ultimate controller (other than the subsidiaries of the licensee) at a time when, 
  

	 	(i)	an undertaking complying with paragraph 1 is not in place in relation to that ultimate controller; or 

  

	 	(ii)	there is an unremedied breach of such undertaking; or 

  

	 	(iii)	the licensee is in breach of the terms of any direction issued by the Authority under paragraph 2 of this condition. 

  

 189 

 Condition 46. Credit Rating of the Licensee 
  

	1.	The licensee shall take all appropriate steps to ensure that the licensee maintains at all times an investment grade issuer credit rating. 

  

	2.	In this condition: 

 “issuer credit rating”
means: 
  

	 	(a)	an issuer rating by Standard & Poor’s Ratings Group or any of its subsidiaries; 

  

	 	(b)	an issuer rating by Moody’s Investors Service Inc. or any of its subsidiaries; 

  

	 	(c)	an issuer senior unsecured debt rating by Fitch Ratings Ltd or any of its subsidiaries; or 

  

	 	(d)	an equivalent rating from any other reputable credit rating agency which, in the opinion of the Authority, notified in writing to the licensee, has comparable standing in both the
United Kingdom and the United States of America. 

 In relation to any issuer credit rating, “investment grade” means:

  

	 	(a)	unless sub-paragraph (b) below applies: 

  

	 	(i)	an issuer rating of not less than BBB- by Standard & Poor’s Ratings Group or any of its subsidiaries; 

  

	 	(ii)	an issuer rating of not less than Baa3 by Moody’s Investors Service Inc. or any of its subsidiaries; 

  

	 	(iii)	an issuer senior unsecured debt rating of not less than BBB- by Fitch Ratings Ltd or any of its subsidiaries; or 

  

	 	(iv)	an equivalent rating from any other reputable credit rating agency which, in the opinion of the Authority, notified in writing to the licensee, has comparable standing in both the
United Kingdom and the United States of America; 

  

	 	(b)	such higher rating as may be specified by those agencies from time to time as the lowest investment grade credit rating. 

  

 190 

 Condition 47. Indebtedness 
  

	1.	In addition to the requirements of standard condition 29 (Disposal of Relevant Assets), the licensee shall not without the prior written consent of the Authority (following the
disclosure by the licensee of all material facts): 

  

	 	(a)	create or continue or permit to remain in effect any mortgage, charge, pledge, lien or other form of security or encumbrance whatsoever, undertake any indebtedness to any other
person or enter into any guarantee or any obligation otherwise than: 

  

	 	(i)	on an arm’s length basis; 

  

	 	(ii)	on normal commercial terms; 

  

	 	(iii)	for a permitted purpose; and 

  

	 	(iv)	(if the transaction is within the ambit of standard condition 29 (Disposal of Relevant Assets)) in accordance with that condition; 

  

	 	(b)	transfer, lease, license or lend any sum or sums, asset, right or benefit to any affiliate or related undertaking of the licensee otherwise than by way of: 

 

	 	(i)	a dividend or other distribution out of distributable reserves; 

  

	 	(ii)	repayment of capital; 

  

	 	(iii)	payment properly due for any goods, services or assets provided on an arm’s length basis and on normal commercial terms; 

  

	 	(iv)	a transfer, lease, licence or loan of any sum or sums, asset, right or benefit on an arm’s length basis, on normal commercial terms and made in compliance with the payment
condition referred to in paragraph 2; 

  

	 	(v)	repayment of or payment of interest on a loan not prohibited by subparagraph (a); 

  

	 	(vi)	payments for group corporation tax relief or for the surrender of Advance Corporation Tax calculated on a basis not exceeding the value of the benefit received; or

  

 191 

	 	(vii)	an acquisition of shares or other investments in conformity with paragraph 2 of standard condition 43 (Restriction on Activity and Financial Ring Fencing) made on an arm’s
length basis and on normal commercial terms, 

 provided, however, that the provisions of paragraph 3 below shall prevail in any
of the circumstances described or referred to therein; 
  

	 	(c)	enter into an agreement or incur a commitment incorporating a cross-default obligation; or 

  

	 	(d)	continue or permit to remain in effect any agreement or commitment incorporating a cross-default obligation subsisting at 1 October 2001, save that the licensee may permit any
cross-default obligation in existence at that date to remain in effect for a period not exceeding twelve months from that date, provided that the cross-default obligation is solely referable to an instrument relating to the provision of a loan or
other financial facilities granted prior to that date and the terms on which those facilities have been made available as subsisting on that date are not varied or otherwise made more onerous, 

 provided, however, that the provisions of sub-paragraphs (c) and (d) shall not prevent the licensee from giving any guarantee permitted by and
compliant with the requirements of sub-paragraph (a). 
  

	2.	The payment condition referred to in paragraph 1(b)(iv) is that the consideration due in respect of the transaction in question is paid in full when the transaction is entered into
unless either: 

  

	 	(a)	the counter-party to the transaction has and maintains until payment is made in full an investment grade issuer credit rating, or 

  

	 	(b)	the obligations of the counter-party to the transaction are fully and unconditionally guaranteed throughout the period during which any part of the consideration remains outstanding
by a guarantor which has and maintains an investment grade issuer credit rating. 

  

 192 

	3.	Except with the prior consent of the Authority, the licensee shall not enter into or complete any transaction of a type referred to or described in paragraph 1(b) save in accordance
with paragraph 4, if: 

  

	 	(a)	the licensee does not hold an investment grade issuer credit rating; 

  

	 	(b)	where the licensee holds more than one issuer credit rating, one or more of the ratings so held is not investment grade; or 

  

	 	(c)	any issuer credit rating held by the licensee is BBB- by Standard & Poor’s Ratings Group or Fitch Ratings Ltd or Baa3 by Moody’s Investors Service, Inc. (or such
higher issuer credit rating as may be specified by any of these credit rating agencies from time to time as the lowest investment grade credit rating), or is an equivalent rating from another agency that has been notified to the licensee by the
Authority as of comparable standing for the purposes of standard condition 46 (Credit Rating of the Licensee) and: 

  

	 	(i)	is on review for possible downgrade; or 

  

	 	(ii)	is on Credit Watch or Rating Watch with a negative designation; 

 or, where neither (i) nor (ii) applies: 
  

	 	(iii)	the rating outlook of the licensee as specified by any credit rating agency referred to in sub-paragraph (c) which at the relevant time has assigned the lower or lowest
investment grade issuer credit rating held by the licensee has been changed from stable or positive to negative. 

  

	4.	Where paragraph 3 applies, the licensee may not without the prior written consent of the Authority (following disclosure of all material facts) transfer, lease, license or lend any
sum or sums, asset, right or benefit to any affiliate or related undertaking of the licensee as described or referred to in paragraph 1(b), otherwise than by way of: 

  

	 	(a)	payment properly due for any goods, services or assets in relation to commitments entered into prior to the date on which the circumstances described in paragraph 3 arise, and which
are provided on an arm’s length basis and on normal commercial terms; 

  

 193 

	 	(b)	a transfer, lease, licence or loan of any sum or sums, asset, right or benefit on an arm’s length basis, on normal commercial terms and where the value of the consideration due
in respect of the transaction in question is payable wholly in cash and is paid in full when the transaction is entered into; 

  

	 	(c)	repayment of, or payment of interest on, a loan not prohibited by paragraph 1(a) and which was contracted prior to the date on which the circumstances in paragraph 3 arise, provided
that such payment is not made earlier than the original due date for payment in accordance with its terms; and 

  

	 	(d)	payments for group corporation tax relief or for the surrender of Advance Corporation Tax calculated on a basis not exceeding the value of the benefit received, provided that the
payments are not made before the date on which the amounts of tax thereby relieved would otherwise have been due. 

  

	5.	In this condition: 

  

			
	“cross-default obligation”	  	means a term of any agreement or arrangement whereby the licensee’s liability to pay or repay any debt or other sum arises or is increased or accelerated or is capable of arising, of
increasing or of being accelerated by reason of a default (howsoever such default may be described or defined) by any person other than the licensee, unless:
		
		  	(i) that liability can arise only as the result of a default by a subsidiary of the licensee;

  

 194 

			
		  	(ii) the licensee holds a majority of the voting rights in that subsidiary and has the right to appoint or remove a majority of its board of directors; and
		
		  	(iii) that subsidiary carries on business only for a purpose within paragraph (a) of the definition of permitted purpose set out in standard condition 32 (Interpretation of Section C
(Distribution Services Obligations)).
		
	“indebtedness”	  	means all liabilities now or hereafter due, owing or incurred, whether actual or contingent, whether solely or jointly with any other person and whether as principal or surety, together with
any interest accruing thereon and all costs, charges, penalties and expenses incurred in connection therewith.
		
	“investment grade”	  	has the meaning given in paragraph 2 of standard condition 46 (Credit Rating of the Licensee).
		
	“issuer credit rating”	  	has the meaning given in paragraph 2 of standard condition 46 (Credit Rating of the Licensee).

  

 195 

 Condition 48. Last Resort Supply: Payment Claims 
  

	1.	This condition sets out the circumstances in which the licensee shall increase its use of system charges in order to compensate any electricity supplier (a “claimant”)
which claims for losses that it has incurred in complying with a last resort supply direction. 

  

	2.	The following provisions apply where the licensee receives from a claimant a valid claim for a last resort supply payment. 

  

	3.	Where the licensee receives a valid claim it shall, during the relevant year, make a consequential increase to its use of system charges in respect of that year which relate to the
distribution of electricity to premises to such an extent as it reasonably estimates to be appropriate to secure that such consequential increase in its revenue equals the specified amount. 

  

	4.	The licensee shall, during, or as soon as practicable after the end of, the relevant year, pay to the claimant, by quarterly or monthly instalments (as specified in the claim), the
amount of that consequential increase in revenue mentioned in paragraph 3 to the extent that it does not exceed the specified amount. 

  

	5.	If the amount paid to the claimant under paragraph 4 is less than the specified amount, the licensee shall in the following year – 

  

	 	(a)	pay to the claimant (in accordance with any directions given by the Authority) the shortfall together with 12 months’ interest thereon; and 

  

	 	(b)	increase the charges which relate to the distribution of electricity to premises during the year following the relevant year to such extent as it reasonably estimates to be
appropriate to secure that the consequential increase in its revenue equals the amount of that shortfall together with 12 months’ interest thereon. 

  

 196 

	6.	If the amount of the consequential increase mentioned in paragraph 3 exceeds the specified amount, the licensee shall, during the year following the relevant year, decrease the
charges which relate to the distribution of electricity to premises to the extent that it reasonably estimates to be necessary in order to reduce its use of system revenue for that year by an amount equal to the excess together with 12 months’
interest thereon. 

  

	7.	Any question whether any estimate for the purposes of paragraph 3, 5 or 6 is a reasonable one shall be determined by the Authority. 

  

	8.	The licensee shall not enter into any use of system agreement with an electricity supplier which does not permit variation of its use of system charges in pursuance of this
condition. 

  

	9.	The provisions of this condition shall have effect notwithstanding that the licensee has not provided the notice required by paragraph 13 of standard condition 4 (Basis of Charges
for Use of System and Connection to System: Requirements for Transparency). 

  

	10.	In calculating the licensee’s use of system revenue during any period for the purposes of a price control condition any increase or decrease in revenue attributable to the
licensee’s compliance with this condition shall be treated as if it had not occurred. 

  

	11.	The licensee shall prepare, in respect of each year in which it increases or decreases charges in pursuance of paragraph 3, 5 or 6, a statement showing - 

 

	 	(a)	the aggregate amount of its revenue derived from increases in charges in pursuance of paragraph 3; 

  

 197 

	 	(b)	the aggregate amount of its revenue derived from increases in charges in pursuance of paragraph 5; 

  

	 	(c)	the aggregate amount of the decrease in its revenue resulting from decreases in charges in pursuance of paragraph 6; and 

  

	 	(d)	in the case of each last resort supply payment, the aggregate payments to the claimant made in respect of the year in question (whenever those payments were made).

  

	12.	The licensee shall give the statements referred to in paragraph 11 to the Authority within the first 4 months of the year following that to which they relate.

  

	13.	On giving the statement mentioned in paragraph 11(d) to the Authority, the licensee shall publish it in such manner as, in the reasonable opinion of the licensee, will secure
adequate publicity for it. 

  

	14.	Where the licensee receives more than one claim for a last resort payment, this condition (other than sub-paragraphs 11(a), (b) and (c)) shall apply separately as respects each
separate claim but in so far as it results in changes to the licensee’s use of system charges it shall have the cumulative effect of such separate applications. 

  

	15.	(a)     For the purposes of this condition – 

 “last resort supply direction” and “last resort supply payment” have, respectively the meanings given to them in standard conditions 29 (Supplier of Last Resort) and 29A (Supplier of Last Resort
Supply Payments) of the standard conditions of the electricity supply licence; 
 “price control condition” means any condition of
the licence which places a monetary limitation on the use of system charges which may be levied or the use of system revenue which may be recovered by the licensee during a given period; 
  

 198 

 “relevant year” means, in relation to any valid claim - 
  

	 	(a)	where the claim was received by the licensee at least 60 days before the beginning of a year, that year; or 

  

	 	(b)	where the claim was received by the licensee less than 60 days before the beginning of a year, the next year; 

 “specified amount” means the amount specified on a valid claim together with interest calculated in accordance with sub-paragraph (b);

 “valid claim” means a claim for which a claimant has been give a consent by the Authority pursuant to standard condition 29A
(Supplier of Last Resort Supply Payments) of the standard conditions of the electricity supply licence; and 
 “year” means a period
of 12 months beginning with 1st April. 
  

	 	(b)	The interest referred to in sub-paragraph (a) is simple interest for the period commencing with the date on which the valid claim was received by the licensee and ending with
the date which is 61 days before the start of the relevant year, except where that period is of 30 days or less, in which case no interest shall be payable. 

  

 199 

 Condition 49. Quality of Service Incentive Scheme and Associated Information 
 Part A: General 
  

	1.	The purposes of this condition are to secure the collection of information on a common basis, and to an appropriate degree of accuracy, by the licensee so as:

  

	 	(a)	to facilitate the establishment and operation of an incentive scheme (“the scheme”) to improve the quality of service performance of the licensee;

  

	 	(b)	to monitor the quality of service performance of the licensee; and 

  

	 	(c)	to monitor any unintended consequences arising from the operation of the scheme and the charge restriction conditions. 

  

	2.	The licensee shall establish and maintain appropriate systems, processes and procedures to measure and record specified information from the dates specified in paragraph 4 and in
accordance with the regulatory instructions and guidance (including any associated information specified therein) for the time being in force pursuant to this condition (“the quality of service rigs”) 

 Part B: Quality of service rigs and specified information 
  

	3.	For the purposes of this condition: 

 “charge
restriction conditions” shall have the same meaning as set out in special condition A1 (Definitions and interpretation). 
 “quality
of service rigs” means the regulatory instructions and guidance issued by the Authority for the purposes of this condition as modified from time to time by direction under paragraph 10 and, subject to paragraphs 13 and 14, may include:

  

	 	(a)	instructions and guidance as to the establishment of different systems, processes, procedures and manners for providing and recording information and of standards for different
classes of information; 

  

 200 

	 	(b)	a timetable for the development of the systems, processes and procedures required to achieve the appropriate standards of accuracy and reliability with which specified information
shall be recorded; 

  

	 	(c)	provisions with respect to the meaning of words and phrases used in defining specified information; 

  

	 	(d)	requirements for the recording of information associated with specified information which are reasonably necessary to enable an examiner to determine the accuracy and reliability of
specified information; 

  

	 	(e)	requirements as to the form and manner in which specified information shall be provided to the Authority; 

  

	 	(f)	requirements as to the form and manner in which specified information shall be recorded and the standards of accuracy and reliability with which it shall be recorded; and

  

	 	(g)	a statement as to whether and to what extent each category of specified information is required for the purposes of the scheme, 

 “specified information” means: 
  

	 	(a)	the number of interruptions in the supply of electricity through the licensee’s distribution system which occur in each period of 12 months commencing on 1 April in each
calendar year and have a duration of: 

  

	 	(i)	less than three minutes, together (in respect of each such interruption) with the number of customers whose supply was interrupted and the cause of that interruption; and

  

	 	(ii)	three minutes or more, together (in respect of each such interruption) with: 

  

	 	(aa)	the number of customers whose supply of electricity was interrupted and the duration of the interruption; 

  

	 	(bb)	the source, voltage level and HV circuit; and 

  

	 	(cc)	the aggregate number of re-interruptions; 

  

	 	(b)	in relation to telephone calls made to the enquiry service operated under paragraph 1 of standard condition 6 (Safety and Security of Supplies Enquiry Service):

  

 201 

	 	(i)	the speed of response for answering each call; and 

  

	 	(ii)	in the case of each call answered by a human operator: 

  

	 	(aa)	the telephone number of the caller; 

  

	 	(bb)	the time of the call; and 

  

	 	(cc)	if known, the name of the caller and whether the caller is or is not a domestic customer; 

  

	 	(c)	(i)       the aggregate number and cause of faults occurring in specified classes or types of electrical plant or 

 electric lines; 
  

	 	(ii)	a statement setting out the asset management strategy of the licensee in respect of the licensee’s distribution system; and 

  

	 	(iii)	a statement of the reasons for any material increase or decrease in the number and cause of faults referred to in sub-paragraph (i) having regard to equivalent data held in
respect of previous years; and 

  

	 	(d)	such other information as may from time to time be specified by the Authority by direction to the licensee in accordance with paragraph 10. 

  

	4.	The licensee shall collect specified information: 

  

	 	(a)	in respect of the matters specified in sub-paragraphs (a), (b) and (c) of the definition of specified information set out in paragraph 3, from and including 1 April
2001; and 

  

	 	(b)	in respect of any matter specified under sub-paragraph (d) of that definition, from the date specified in the direction given in accordance with paragraph 10.

 Part C: Information to be provided to the Authority 
  

	5.	The licensee shall provide to the Authority: 

  

	 	(a)	the information referred to in sub-paragraph (b)(ii) of the definition of specified information set out in paragraph 3 for each week, within four days of the end of that week;

  

 202 

	 	(b)	the information referred to in sub-paragraphs (a), (b)(i) and (c) of that definition, on or before 31 May 2002 and 30 April in each succeeding year (or such later
date as the Authority may by notice specify) in respect of the period of 12 months expiring on the preceding 31 March; and 

  

	 	(c)	the information referred to in sub-paragraph (d) of that definition in respect of such period and by such date as are specified in the direction given under paragraph 10.

 Part D: Audit requirements 
  

	6.	The licensee shall permit a person or persons nominated by the Authority (in each case “an examiner”) to examine: 

  

	 	(a)	the systems, processes and procedures referred to in paragraph 2 and their operation; 

  

	 	(b)	the specified information collected by the licensee; and 

  

	 	(c)	the extent to which each of the matters mentioned in sub-paragraphs (a) and (b) complies, and is in accordance, with the quality of service rigs. 

 

	7.	The licensee shall (and shall procure, insofar as it is able to do so, that any affiliate or related undertaking of the licensee, any person by whom it procures the performance of
the obligation in paragraph 2 and any auditor of such person, or of the licensee or any affiliate or related undertaking of the licensee, shall) cooperate fully with an examiner so as to enable him to carry out, complete and report to the Authority
on any examination carried out in accordance with paragraph 6. 

  

	8.	The licensee’s obligation under paragraph 7 to co-operate or procure cooperation with an examiner shall include, without limitation and insofar as may be necessary or expedient
for such purpose, in each case subject to reasonable prior notice to the licensee: 

  

	 	(a)	providing access to management, employees, agents or independent contractors of the licensee sufficient to enable the examiner to make any enquiries and to discuss any matters which
he reasonably considers to be relevant to the carrying out of the examination; 

  

 203 

	 	(b)	giving to the examiner access at reasonable hours to any premises occupied by the licensee or any other person in performing the obligations set out in this condition; and

  

	 	(c)	allowing the examiner at reasonable hours: 

  

	 	(i)	to inspect and make copies of, and take extracts from, any documents and records of the licensee maintained in relation to specified information (other than information which is
subject to legal privilege); 

  

	 	(ii)	to carry out inspections, measurements and tests on or in relation to any systems maintained and operated for or in relation to the requirements of this condition; and

  

	 	(iii)	to take onto such premises or onto or into any assets used for the purposes of the licensee such other persons and such equipment as may be necessary or expedient for the purpose of
carrying out the examination. 

  

	9.	The licensee’s performance of its obligations under this Part D is conditional on the examiner having entered into an agreement with the licensee to maintain confidentiality on
reasonable terms. 

 Part E: Modification of the quality of service rigs 
  

	10.	Where the Authority considers that the quality of service rigs should be modified to: 

  

	 	(a)	improve the presentation or style of the requirements of those rigs; 

  

	 	(b)	remove or reduce inconsistencies between distribution services providers in the application or interpretation of such requirements; 

  

	 	(c)	further clarify the meaning of words and phrases used within such requirements to define the information to be provided; 

  

 204 

	 	(d)	improve the form or manner in which such information is to be provided under such requirements; or 

  

	 	(e)	introduce additional categories of specified information or enlarge existing categories of specified information; 

 in such ways as the Authority may reasonably require so as more effectively to achieve the purpose of this condition, the Authority may, subject to
paragraphs 11 to 14 below and to paragraph 15 of special condition C2 (Calculation of charge restriction adjustments arising from performance in respect of quality of service), modify the quality of service rigs by issuing a direction for that
purpose to all distribution services providers. 
  

	11.	Before issuing a direction under paragraph 10, the Authority, by notice given to all distribution services providers, must: 

  

	 	(a)	state that it proposes to make a modification and set out the date on which it proposes that this should take effect; 

  

	 	(b)	set out the text of the modification, the purpose and effect of the modification and the reasons for proposing it; and 

  

	 	(c)	specify the time (not being less than 28 days from the date of the notice) within which representations or objections with respect to the proposed modification may be made, and must
consider any representations or objections which have been duly made and not withdrawn, and give reasons for its decision. 

  

	12.	Where any proposed modification of the quality of service rigs relates: 

  

	 	(a)	to a requirement under those rigs to provide specified information to a greater level of accuracy; or 

  

	 	(b)	to the introduction into those rigs of an additional category of specified information which is or is intended to be required for the purposes of the scheme;

  

 205 

 the Authority may not make that modification except in accordance with the procedure under section 11A of
the Act which would apply to the modification as if it were a modification of this condition. 
  

	13.	Any modification of the quality of service rigs under paragraph 10 to introduce an additional category of specified information or to enlarge an existing category of information may
not exceed what may reasonably be requested from the licensee by the Authority under paragraph 1 of standard condition 24 (Provision of Information to the Authority), excluding any reference to paragraph 8 of that condition.

  

	14.	The provisions of the quality of service rigs may not exceed what is reasonably required to achieve the purposes of this condition or purport to have effect with respect to the
interpretation of any other condition of this licence or the fulfillment by the licensee of any obligation imposed in respect of any matter which is the subject of any such condition. 

  

 206 

 Condition 50. Price Control Revenue Reporting and Associated Information 
 Part A: General 
  

	1.	The purposes of this condition are to secure the collection of specified information on a common basis, and to an appropriate degree of accuracy, by the licensee so as to enable the
Authority to effectively monitor the compliance of the licensee with the charge restriction conditions. 

  

	2.	The licensee shall establish and maintain appropriate systems, processes and procedures to measure and record specified information from the dates specified in paragraph 4 and in
accordance with the regulatory instructions and guidance (including any associated information specified therein) for the time being in force pursuant to this condition (the “revenue reporting rigs”). 

 Part B: Revenue reporting rigs and specified information 
  

	3.	For the purposes of this condition: 

  

	 	(a)	“charge restriction conditions” shall have the same meaning as set out in special condition A1 (Definitions and interpretation). 

  

	 	(b)	“revenue reporting rigs” means the instructions and guidance issued by the Authority for the purposes of this condition as modified from time to time by a direction under
paragraph 10 and, subject to paragraphs 13 and 14, may include: 

  

	 	(i)	provisions with respect to the meaning of words and phrases used in defining specified information; 

  

	 	(ii)	requirements for the recording of specified information which are reasonably necessary to enable an appropriate auditor to determine the accuracy and reliability of specified
information; 

  

 207 

	 	(iii)	requirements as to the form and manner in which specified information shall be provided to the Authority (including templates for doing so); and 

  

	 	(iv)	requirements as to the form and manner in which specified information shall be recorded and the standards of accuracy and reliability with which it shall be recorded.

  

	 	(c).	“relevant year t” shall have the same meaning as in special condition A1 (Definitions and interpretation). 

  

	 	(d)	“specified information” means such items referred to in special licence conditions A1 to F1 as the Authority considers are necessary to monitor, to an appropriate degree
of accuracy, compliance with the charge restriction conditions, and shall include: 

  

	 	(i)	in relation to the restriction on demand use of system charges: 

  

	 	(aa)	regulated demand revenue; 

  

	 	(bb)	units distributed; 

  

	 	(cc)	distribution losses; and 

  

	 	(dd)	allowed demand revenue and its associated terms as set out in special conditions B1 to C3; 

  

	 	(ii)	in relation to the restriction on generation use of system charges: 

  

	 	(aa)	network generation revenue; and 

  

	 	(bb)	allowed network generation revenue and its associated terms as set out in special conditions D1 to D2; 

  

	 	(iii)	in relation to the restriction on basic metering charges: 

  

	 	(aa)	charges for the service of basic meter asset provision; 

  

	 	(bb)	basic meter operation revenue; and 

  

	 	(cc)	allowed meter operation revenue and its associated terms as set out in special condition F1 (Restriction of basic metering charges); 

  

	 	(iv)	a breakdown of revenue that falls under the category of excluded services; 

  

	 	(v)	details of the licensee’s de minimis business and associated income; and 

  

 208 

	 	(vi)	such other information as is specified in the revenue reporting rigs, or as may from time to time be specified by the Authority in a direction issued in accordance with paragraph
10. 

  

	4.	The licensee shall collect specified information: 

  

	 	(a)	in respect of the matters specified in paragraphs 3(d)(i) to (v) from and including 1 April 2005; and 

  

	 	(b)	in respect of any matter specified under paragraph 3(d)(vi): 

  

	 	(i)	where such information is specified as a requirement of the revenue reporting rigs in force on 1 April 2005, from and including 1 April 2005; and 

 

	 	(ii)	where such information is specified by the Authority, in a direction issued in accordance with paragraph 10, from the date specified in that direction. 

 Part C: Information to be provided to the Authority 
  

	5.	The licensee shall provide to the Authority: 

  

	 	(a)	the information specified in template A (“the detailed return”) of the revenue reporting rigs by no later than 31 July following the end of the relevant year t;

  

	 	(b)	the information specified in template B (“the forecast return”) of the revenue reporting rigs by no later than 1 April of relevant year t, being the licensee’s
estimate of that information made on or before 1 April; and 

  

	 	(c)	the information specified in template B (“the forecast return”) of the revenue reporting rigs by no later than 31 October of the relevant year t, being the
licensee’s revised estimate of the specified items made after 31 July of that year. 

  

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 Part D: Audit requirements 
  

	6.	The information referred to in paragraph 5(a) shall be accompanied by a report addressed to the Authority from an appropriate auditor, as defined in standard licence condition 42
(Regulatory Accounts), stating whether in his opinion: 

  

	 	(a)	the information in relation to each of the items referred to in the statement has been properly prepared; and 

  

	 	(b)	the amounts presented are in accordance with the licensee’s records which have been maintained in accordance with paragraph 2 of this condition. 

  

	7.	The licensee shall require that the report from the appropriate auditor, referred to in paragraph 6, is accompanied by a letter from that auditor to the Authority detailing the
procedures that the auditor has followed in reaching his opinion. 

  

	8.	For the purposes of paragraph 6, the licensee shall at its own expense enter into a contract of appointment with the appropriate auditor which includes a term requiring that the
audit be conducted in accordance with all such relevant auditing standards in force on the last day of the financial year to which the audit relates as would be appropriate. 

  

	9.	The licensee shall (and must procure, insofar as it is able to do so, that any affiliate or related undertaking of the licensee shall) co-operate fully with the appropriate auditor
so as to enable him to complete and report to the Authority on any audit carried out in accordance with paragraph 6. 

 Part E:
Modification of the revenue reporting rigs 
  

	10.	Where the Authority considers that the revenue reporting rigs should be modified to: 

  

	 	(a)	improve the presentation or style of the requirements of those rigs; 

  

	 	(b)	remove or reduce inconsistencies between distribution services providers in the application or interpretation of such requirements; 

  

 210 

	 	(c)	further clarify the meaning of words and phrases used within such requirements to define the information to be provided; 

  

	 	(d)	improve the form or manner in which such information is to be provided under such requirements; or 

  

	 	(e)	introduce additional categories of specified information or enlarge existing categories of specified information, in such ways as are necessary to more effectively achieve the
purposes of this condition, the Authority may, subject to paragraphs 11 to 14, modify the revenue reporting rigs by issuing a direction for that purpose to all distribution services providers. 

  

	11.	Before issuing a direction under paragraph 10, the Authority, by notice given to all distribution services providers, must: 

  

	 	(a)	state that it proposes to make a modification, and set out the date on which it proposes that this should take effect; 

  

	 	(b)	set out the text of the modification, the purpose and effect of the modification, and the reasons for proposing it; and 

  

	 	(c)	specify the time (not being less than 28 days from the date of the notice) within which representations or objections with respect to the proposed modification may be made; and
consider any representations or objections which have been duly made and are not withdrawn, and give reasons for its decision. 

  

	12.	Where any proposed modification of the revenue reporting rigs relates to a requirement to provide specified information to a greater level of accuracy than was required previously
the Authority may not make that modification except in accordance with the procedure under section 11A of the Act which would apply to the modification as if it were a modification of this condition. 

  

	13.	Any modification of the revenue reporting rigs under paragraph 10 to introduce an additional category of specified information or to enlarge an existing category of information
shall not 

  

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 exceed what may reasonably be requested from the licensee by the Authority under paragraph 1 of standard
condition 24 (Provision of Information to the Authority), excluding any reference to paragraph 8 of that condition. 
  

	14.	The provisions of the revenue reporting rigs may not exceed what is necessary to achieve the purposes of this condition or purport to have effect with respect to the interpretation
of any other condition of this licence or the fulfillment by the licensee of any obligation imposed in respect of any matter which is the subject of any such condition. 

 Part F: Dealing with an event with a material impact on the consistency or accuracy of information 
  

	15.	Where the revenue reporting rigs do not provide adequate or sufficient guidance in relation to the collection and reporting of specified items following: 

 

	 	(a)	a change in industry processes or procedures on or after 1 April 2005 which has a significant effect on the calculation of one or more specified items; or

  

	 	(b)	a change in the processes or procedures of the licensee on or after 1 April 2005 which has a significant effect on the calculation of one or more specified items, the licensee
shall request guidance from the Authority in relation to the treatment of such items. 

  

	16.	For the purposes of this condition, a “significant effect” is defined as a change to the calculation of one or more specified items such that: 

  

	 	(a)	its effect on the calculation of allowed demand revenue exceeds, or is likely to exceed, 1 per cent of base demand revenue as defined in paragraph 4 of special condition B1
(Restriction of distribution charges: demand use of system charges); or 

  

	 	(b)	its effect on the calculation of allowed network generation revenue exceeds, or is likely to exceed, an amount which is equal to 0.5 per cent of base demand revenue as defined
in paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges). 

  

 212 

	17.	On receipt of a request for guidance in accordance with paragraph 15, the Authority may: 

  

	 	(a)	having regard to whether the change to the calculation of one or more specified items has material implications for other distribution services providers; and

  

	 	(b)	after consultation with the licensee and (where relevant, having regard to sub-paragraph (a)) other distribution services providers; 

 by notice to the licensee and (where relevant) other distribution services providers direct how such specified items should be reported for the purposes
of this condition. 
 Part G: Restatement of information 
  

	18.	For the purposes of this condition, the licensee shall take all appropriate steps within its power to ensure that information provided to the Authority in respect of a given
relevant year under paragraph 5(a) is not restated after the date on which that information has been so provided except where restatement is necessary in the opinion of the appropriate auditor referred to in paragraph 6. 

  

 213 

 Condition 51. Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding and
Registered Power Zones 
 Part A: General 
  

	1.	The purposes of this condition are to secure the collection of information on a common basis, and to an appropriate degree of accuracy, by the licensee so as:

  

	 	(a)	to facilitate the establishment and operation of: 

  

	 	(i)	the distributed generation incentive scheme (“scheme A”) to incentivise the effective connection and utilisation of distributed generation by the licensee;

  

	 	(ii)	the innovation funding incentive scheme (“scheme B”) to incentivise effective expenditure on innovation by the licensee; and 

  

	 	(iii)	the registered power zone incentive scheme (“scheme C”) to incentivise the development and implementation of innovative approaches to further enhance the effective
connection and utilisation of distributed generation by the licensee; 

  

	 	(b)	to monitor the performance of the licensee in respect of each of the above incentive schemes; and 

  

	 	(c)	to monitor any unintended consequences that arise from the operation of the schemes and the charge restriction conditions. 

  

	2.	The licensee shall establish and maintain appropriate systems, processes and procedures to measure and record the specified information from the dates specified in paragraph 4 and
in accordance with the regulatory instructions and guidance (including any associated information specified therein) for the time being in force pursuant to this condition (the “DG rigs”). 

  

 214 

 Part B: DG rigs and specified information 
  

	3.	For the purposes of this condition: 

  

	 	(a)	“charge restriction conditions” shall have the same meaning as set out in special condition A1 (Definitions and interpretation). 

  

	 	(b)	“DG rigs” means the instructions and guidance issued by the Authority for the purposes of this condition as modified from time to time by a direction under paragraph 9
and, subject to paragraph 13, may include: 

  

	 	(i)	provisions with respect to the meaning of words and phrases used in defining specified information; 

  

	 	(ii)	requirements for the recording of information associated with specified information which are reasonably necessary to enable an examiner to determine the accuracy and reliability of
specified information; 

  

	 	(iii)	requirements as to the form and manner in which specified information shall be provided to the Authority; 

  

	 	(iv)	requirements as to the form and manner in which specified information shall be recorded and the standards of accuracy and reliability with which it shall be recorded; and

  

	 	(v)	a statement as to whether and to what extent each category of specified information is required for the purposes of the schemes referred to in paragraph 1 of this condition.

  

	 	(c)	“specified information” means such items as are referred to in the “DG rigs and shall include: 

  

	 	(i)	in relation to scheme A: 

  

	 	(aa)	the total incentivised DG capacity; 

  

	 	(bb)	disaggregated DG capacity; 

  

	 	(cc)	total capex for DG; 

  

	 	(dd)	use of system capex for DG; 

  

	 	(ee)	shared connection capex for DG; 

  

	 	(ff)	assets transferred out of DG capex to demand capex; 

  

 215 

	 	(gg)	DG network unavailability; 

  

	 	(hh)	DG network unavailability rebate payments; and 

  

	 	(ii)	operational and maintenance costs for DG; 

  

	 	(ii)	in relation to scheme B: 

  

	 	(aa)	IFI carry-forward; 

  

	 	(bb)	eligible IFI expenditure; 

  

	 	(cc)	eligible IFI internal expenditure; 

  

	 	(dd)	combined distribution network revenue; and 

  

	 	(ee)	the IFI annual report; 

  

	 	(iii)	in relation to scheme C: 

  

	 	(aa)	a schedule of all RPZ projects, whether planned, committed, under construction or in operation, detailing their starting year, generating capacity in MW, connection cost and a
summary of the innovation content of the RPZ; 

  

	 	(bb)	for RPZs in operation a report of the performance achieved in the reporting year; and 

  

	 	(iv)	such other information as may from time to time be specified by the Authority for the purposes of scheme A, B or C by direction to the licensee in accordance with paragraph 9.

  

	 	(d)	“reporting year” means a twelve-month period ending on 31 March. 

  

	4.	The licensee shall collect specified information: 

  

	 	(a)	in respect of the matters specified in paragraphs 3(c)(i) to (iii), from and including 1 April 2005; and 

  

	 	(b)	in respect of any matter specified under paragraph 3(c)(iv,) from the date specified in the relevant direction given in accordance with paragraph 9. 

  

 216 

 Part C: Information to be provided to the Authority 
  

	5.	The licensee shall provide to the Authority: 

  

	 	(a)	subject to sub-paragraph (b), the information referred to in paragraphs 3(c)(i) to (iii) , in respect of the period of 12 months expiring on the preceding 31 March, on or
before 31 July of each subsequent year (or such later date as the Authority may by notice specify); 

  

	 	(b)	an estimate of the information referred to in sub-paragraph (aa) of paragraph 3(c)(ii) for each reporting year on or before 1 April for that year; and 

 

	 	(c)	the information referred to in paragraph 3(c)(iv) in respect of such period and by such date as is specified in the relevant direction given in accordance with paragraph 9.

 Part D: Audit requirements 
  

	6.	The licensee shall permit a person or persons nominated by the Authority (in each case “an examiner”) to examine: 

  

	 	(a)	the systems, processes and procedures referred to in paragraph 2 and their operation; 

  

	 	(b)	the specified information collected by the licensee; and 

  

	 	(c)	the extent to which each complies, and is in accordance, with the provisions of the DG rigs. 

  

	7.	The licensee shall (and must procure, insofar as it is able to do so, that any affiliate or related undertaking of the licensee, any person by whom it procures the performance of
the obligation in paragraph 2 and any auditor of such person, or of the licensee or any affiliate or related undertaking of the licensee, shall) cooperate fully with an examiner so as to enable him to carry out, complete and report to the Authority
on any examination carried out in accordance with paragraph 6. 

  

 217 

	8.	The licensee’s performance of its obligations under this Part D is conditional on the examiner having entered into an agreement with the licensee to maintain confidentiality on
reasonable terms. 

 Part E: Modification of the DG rigs 
  

	9.	Where the Authority considers that the DG rigs should be modified to: 

  

	 	(a)	improve the presentation or style of the requirements of those rigs; 

  

	 	(b)	remove or reduce inconsistencies between distribution services providers in the application or interpretation of such requirements; 

  

	 	(c)	further clarify the meaning of words and phrases used within such requirements to define the information to be provided; 

  

	 	(d)	improve the form or manner in which such information is to be provided under such requirements; or 

  

	 	(e)	introduce additional categories of specified information or enlarge existing categories of specified information; 

 in such ways as are reasonably required to more effectively achieve the purposes of this condition, the Authority may, subject to paragraphs 10 to 13,
modify the DG rigs by issuing a direction for that purpose to all distribution services providers. 
  

	 	10.	Before issuing a direction under paragraph 9, the Authority, by notice given to all distribution services providers, must: 

  

	 	(a)	state that it proposes to make a modification, and set out the date on which it proposes that this should take effect; 

  

	 	(b)	set out the text of the modification, the purpose and effect of the modification and the reasons for proposing it; and 

  

	 	(c)	specify the time (not being less than 28 days from the date of the notice) within which representations or objections with respect to the proposed modification may be made, and must
consider any representations or objections which have been duly made and not withdrawn, and give reasons for its decision. 

  

 218 

	11.	Where any proposed modification of the DG rigs relates: 

  

	 	(a)	to a requirement of those rigs to provide specified information to a greater level of accuracy than was required previously; or 

  

	 	(b)	to the introduction into those rigs of an additional category of specified information which is or is intended to be required for the purposes of any of the schemes to which
paragraph 1 refers, 

 the Authority may not make that modification except in accordance with the procedure under section 11A of
the Act which would apply to the modification if it were a modification of this condition. 
  

	12.	Any modification of the DG rigs under paragraph 9 to introduce an additional category of specified information or to enlarge an existing category of information may not include
information that could not be reasonably requested from the licensee by the Authority under paragraph 1 of standard condition 24 (Provision of Information to the Authority), excluding any reference to paragraph 8 of that condition.

  

	13.	The provisions of the DG rigs may not exceed what is reasonably required to achieve the purposes of this condition or purport to have effect with respect to the interpretation of
any other condition of this licence or the fulfillment by the licensee of any obligation imposed in respect of any matter which is the subject of any such condition. 

  

 219 

 Condition 52. Price Control Review Information 
 Part A: Application and purpose 
  

	1.	This condition takes effect on 1 April 2005 and applies in respect of the price control review information of the licensee relating to the financial year commencing
1 April 2005 and each succeeding financial year for the purposes set out in paragraph 2. 

  

	2.	Those purposes are: 

  

	 	(a)	to ensure that the licensee maintains (and secures that any affiliate or related undertaking of the licensee maintains) such accounting records, other records, and reporting
arrangements as are necessary to enable the licensee to prepare price control review information for submission to the Authority in accordance with the requirements of this condition; 

  

	 	(b)	to establish, by 1 April 2006, a common set of rules which are to apply to the collection and preparation of price control review information for submission to the Authority by
the licensee and every other relevant electricity distributor (“the price control review reporting rules”); 

 and
thereby: 
  

	 	(c)	to facilitate any review or modification by the Authority of the requirements of any of the charge restriction conditions of this licence (“a price control review”).

 Part B: Preparation of price control review information 
  

	3.	Unless and insofar as the Authority otherwise consents, the licensee must: 

  

	 	(a)	keep or cause to be kept for a period approved by the Authority, but not less than the period referred to in section 222(5)(b) of the Companies Act 1985 and in the manner referred
to in that section, such accounting records and other records as are 

  

 220 

 necessary to ensure that the price control review information of, or reasonably attributable to, the
distribution business is separately identifiable in the accounting records of the licensee (and of any affiliate or related undertaking of the licensee); and 
  

	 	(b)	prepare and submit to the Authority, on a consistent basis from such accounting records in respect of each financial year, price control review information for such aspects of the
licensee’s distribution business and of the business of each affiliate or related undertaking of the licensee that either directly or indirectly provides goods and services to the licensee or forms part of the distribution business, either
separately or consolidated, and in such manner and in respect of such financial year as may be required under the price control review reporting rules. 

 Part C: Delivery and review of price control review information 
  

	4.	Unless and insofar as the Authority otherwise consents, the licensee must deliver the price control review information to the Authority as soon as is reasonably practicable, and in
any event not later than 31 July following the end of the financial year to which such information relates. 

  

	5.	The Authority may, in addition to any audit of the regulatory accounts of the licensee carried out in accordance with standard condition 42 (Regulatory Accounts), review, or arrange
for a person nominated by the Authority (“a reviewer”) to review, matters in the price control review information in respect of which the Authority requires clarification. 

  

	6.	Subject to paragraph 7, the licensee, in relation to the purposes of any review carried out under paragraph 5: 

  

	 	(a)	shall give the Authority or (as the case may be) the reviewer all such assistance as it or he may reasonably require; and 

  

 221 

	 	(b)	shall (and must procure, insofar as it is able to do so, that any affiliate or related undertaking of the licensee, any person by whom it procures the performance of any obligation
under this condition and any auditor of such person, or of the licensee or any affiliate or related undertaking of the licensee, shall) co-operate fully with the Authority or (as the case may be) with the reviewer so as to enable him to carry out
and complete his review for the Authority. 

  

	7.	Where a reviewer has been nominated in accordance with paragraph 5, the licensee’s performance of its obligations under paragraph 6 in relation to the reviewer is conditional
on the reviewer’s having entered into an agreement with the licensee to maintain confidentiality on reasonable terms. 

 Part D:
Establishment of the price control review reporting rules 
  

	8.	The price control review reporting rules shall be the rules of that name, issued by direction of the Authority in accordance with the provisions of paragraph 9 for the purposes of
this condition generally, as from time to time modified by the Authority in accordance with the provisions of Part F of this condition, and with which the licensee and every other relevant electricity distributor shall be required to comply for the
purposes of collecting and preparing price control review information for submission to the Authority. 

  

	9.	Before issuing a direction under paragraph 8, the Authority must have: 

  

	 	(a)	given notice to all relevant electricity distributors: 

  

	 	(i)	stating that it intends to issue the price control review reporting rules, 

  

	 	(ii)	setting out the contents of those rules and the date on which it is proposed that the direction should take effect, and 

  

	 	(iii)	specifying the period (not being less than 28 days from the date of the notice) within which representations or objections with respect to those rules may be made;

  

 222 

	 	(b)	considered any representations or objections which are duly made and not withdrawn; and 

  

	 	(c)	given reasons for its decision. 

  

	10.	The licensee shall take all appropriate steps within its power: 

  

	 	(a)	in conjunction and co-operation with every other relevant electricity distributor; and 

  

	 	(b)	in accordance with a programme of work and an associated timetable established and directed by the Authority in consultation with all relevant electricity distributors,

 to develop the price control review reporting rules for implementation pursuant to this condition by 1 April 2006.

 Part E: Content of the price control review reporting rules 
  

	11.	Subject to paragraphs 12 to 15, the price control review reporting rules may, in relation to any requirement of this condition in respect of the price control review information,
specify: 

  

	 	(a)	the meaning to be applied to words and phrases (other than those defined in this or any other condition of this licence) used in connection with such information;

  

	 	(b)	the methodology for calculating or deriving numbers comprising any part of such information; 

  

	 	(c)	requirements as to the form and manner in which such information must be recorded; 

  

	 	(d)	requirements as to the standards of accuracy and reliability with which such information must be recorded; 

  

	 	(e)	requirements as to the form and the content of such information; 

  

	 	(f)	requirements as to the manner in which such information must be provided to the Authority; and 

  

	 	(g)	requirements as to those parts of such information which may fall to be considered by a reviewer and the nature of that consideration, 

  

 223 

 and (having particular regard to the provisions of section 105 of the Utilities Act 2000) may also
specify which (if any) of the information provided under this condition is to be subject to publication by the Authority. 
  

	12.	The price control review reporting rules may not: 

  

	 	(a)	exceed what is necessary to achieve the purposes of this condition, having regard in particular to the materiality of the costs likely to be incurred by the licensee in complying
therewith; or 

  

	 	(b)	purport to have effect with respect to the interpretation of any other condition of this licence or the fulfillment by the licensee of any obligation imposed in respect of any
matter which is the subject of any such condition. 

 Part F: Modification of the price control review reporting rules 
  

	13.	The Authority may modify, in whole or in part, any price control review reporting rules established in accordance with Part D of this condition, in accordance with the following
provisions of this Part F. 

  

	14.	Subject to paragraph 15, where the Authority considers that it is necessary to modify the price control review reporting rules in order to provide more accurate, consistent, useful
or comparable information for the purposes of a price control review, it may do so by issuing a direction to that effect where it: 

  

	 	(a)	has first given notice to all relevant electricity distributors: 

  

	 	(i)	stating that it proposes to make the modification, 

  

	 	(ii)	setting out the text of the modification, the purpose and effect of the modification and the date on which it is proposed to come into effect, and 

  

	 	(iii)	specifying the period (not being less than 28 days from the date of the notice) within which representations or objections with respect to the proposed modification may be made;

  

 224 

	 	(b)	has considered any representations or objections which are duly made and not withdrawn; and 

  

	 	(c)	has given reasons for its decisions. 

  

	15.	Where a modification of the price control review reporting rules relates to the introduction into those rules of a requirement to provide: 

  

	 	(a)	a new category of price control review information; or 

  

	 	(b)	an existing category of price control review information to a greater level of detail; 

 and in either case such information has not previously been collected by the licensee (whether under the provisions of the price control review reporting rules or otherwise), it shall not be a breach of that
requirement for the licensee to provide estimates in respect of that category, for the year in which the modification is made and for any preceding year, derived from such other information available to the licensee as may be appropriate for that
purpose. 
 Part G: Interpretation 
  

	16.	A consent under paragraph 3 or 4 may be given in relation to some or all of the requirements of the relevant paragraph and subject to such conditions as the Authority considers
appropriate or necessary having regard to the purposes of this condition. 

  

	17.	For the purposes of this condition: 

 “price control
review information” means the information required to be submitted by the licensee pursuant to this condition, and is to be interpreted in accordance with the price control review reporting rules; and 
 “relevant electricity distributor” means an electricity distributor in whose licence this condition has effect. 
  

 225 

 PART IV SPECIAL CONDITIONS 
 SCHEDULE 
 SPECIAL CONDITION A1 – Definitions and interpretation 

 

	1.	Unless the context otherwise requires, words and expressions used in the standard conditions of this licence shall have the same meaning when used in these special conditions.

  

	2.	Special conditions A2 to F1 shall apply to the licensee in respect of the distribution services area (as defined in standard condition 1(Definitions and interpretation)) of the
licensee. 

  

	3.	Special condition G1 shall apply outside the distribution services area of the licensee. 

  

	4.	In special conditions A2 to G1: 

  

			
	“allowed demand revenue”	  	 means:
  
 (a)      in the relevant year commencing 1 April 2005 and every subsequent relevant year, the
revenue calculated in accordance with the formula set out in paragraph 3 of special condition B1 (Restriction of distribution charges: demand use of system charges); and
  

(b)      in any relevant year preceding 1 April 2005, the revenue calculated by
multiplying:
  
 (i)       the maximum average charge per unit distributed (arising from the application of the formula set out in paragraph 1 of special condition B (Restriction of distribution charges), or in Scotland
special condition C, of this licence in the form in which it was in force at 31 March 2005); and
  
 (ii)      the regulated quantity distributed (calculated in accordance with special condition A
(Definitions and interpretation), or in Scotland special condition B, of this licence in the form in which it was in force at 31 March 2005).

		
	“allowed meter operation revenue”	  	means the revenue calculated in accordance with the formula set out in paragraph 9 of special condition F1 (Restriction of basic metering charges).
		
	“allowed network generation revenue”	  	 (a)      in the relevant year commencing 1 April 2005 and every subsequent relevant year, means the revenue
calculated in accordance with the formula set out in paragraph 2 of special condition D1 (Restriction of distribution charges: generation use of system charges); and

  

 226 

			
		  	 (b)      in any relevant year preceding 1 April 2005, shall take the value of zero.

		
	“allowed pass-through items”	  	means the items referred to in special condition B2 (Restriction of distribution charges: allowed pass-through items).
		
	“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 in question falls to be made.
		
	“base demand revenue”	  	means the revenue calculated in accordance with the formula set out in paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges).
		
	“basic meter asset provision charges”	  	means the charges levied by the licensee for basic meter asset provision in accordance with paragraph 1 of standard condition 36C (Basis of Charges for Basic Metering Services and Data Services:
Requirements for Transparency).
		
	“basic meter operation revenue”	  	means the revenue (measured on an accruals basis) derived by the licensee from charges levied in respect of basic meter operation services in accordance with paragraph 1 of standard condition
36C (Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency).
		
	“business rates”	  	 means:
  
 (a)      in England and Wales, the rates payable by the licensee in respect of hereditaments on the
Central Rating Lists (England and Wales) compiled under section 52 of the Local Government Finance Act 1988; and
  
 (b)      in Scotland, the rates payable by the licensee in respect of any land and heritages on the
Valuation Rolls compiled under the Local Government Scotland Act 1975, the Local Government etc (Scotland) Act 1994, or any legislation amending or replacing those enactments.

		
	“charge restriction conditions”	  	means special conditions A2 to F1 inclusive as from time to time modified or replaced in accordance with the provisions of the Act.
		
	“combined allowed distribution network revenue”	  	means the total amount of allowed demand revenue and allowed network generation revenue.
		
	“combined distribution network revenue”	  	means the total amount of regulated demand revenue and network generation revenue.

  

 227 

			
	“demand customer”	  	means, in relation to any energised or de-energised exit point on the licensee’s distribution system for which there is a valid metering point administration number, the person who is
taking, or is deemed to be taking, a supply of electricity through that exit point.
		
	“demand use of system charges”	  	means charges levied by the licensee in accordance with paragraph 2 of standard condition 4A (Charges for Use of System) in respect of demand customers.
		
	“DG”	  	for the purposes of special condition D2 only (Calculation of charge restriction adjustments arising from the incentive schemes for distributed generation and registered power zones), and
whether on its own or as part of another defined term, means distributed generation.
		
	“directly connected”	  	in relation to any premises, means so connected to the licensee’s distribution system that the final connection to the premises is from that system (and “indirectly connected”
means other than directly connected).
		
	“distribution charges”	  	means charges levied by the licensee in respect of the provision of distribution services.
		
	“distributed generation”	  	means an installation comprising any plant or apparatus for the production of electricity which is directly connected to the licensee’s distribution system or is connected to that system
through one or more independent or private networks (other than through an onshore transmission system) directly connected to it.
		
	“distribution losses”	  	means the amount, in units, being the difference between the units entering the licensee’s distribution system and the units distributed.
		
	“distribution services”	  	means all services provided by the licensee as part of its distribution business other than excluded services.
		
	“distribution unit category”	  	means (as the case may be) HV units or LV1 units or LV2 units or LV3 units.
		
	“EHV premises”	  	 means:
  
 (a)      in relation to premises connected to the licensee’s distribution system at 31 March
2005, those EHV premises which would, had this licence continued in the form in which it was in force on 31 March 2005, have been notified in writing to the Authority by the licensee by 31 July 2005 in accordance with paragraph 9 of special
condition D (Information to be provided to the Authority in connection with the charge restriction conditions), or in Scotland special condition E of that Licence; and

  

 228 

			
		  	(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 connection materially
altered on or after 1 April 2005, those premises which are so connected at a voltage of 22 kilovolts or greater, or at a substation with a primary voltage of 66 kilovolts or higher.
		
	“EHV units”	  	means units distributed by the licensee which are transported to EHV premises.
		
	“entry point”	  	means a point at which units, whether metered or unmetered, enter the licensee’s distribution system.
		
	“excluded services”	  	means those services provided by the licensee as part of its distribution business which, in accordance with special condition A2 (Scope of the charge restriction conditions), fall to be treated
as excluded services.
		
	“exit point”	  	means a point at which units, whether metered or unmetered, leave the licensee’s distribution system (and, for the avoidance of doubt, includes a point of connection to the licensee’s
distribution system).
		
	“generation use of system charges”	  	means charges levied by the licensee in accordance with paragraph 2 of standard condition 4A (Charges for Use of System) in respect of distributed generation.
		
	“HV units”	  	means units (other than EHV units) distributed by the licensee which are delivered to exit points on the licensee’s distribution system at a voltage of 1000 volts or
greater.
		
	“incentive payment”	  	means an adjustment to allowed revenues, whether allowed demand revenue or allowed network generation revenue, representing the penalty or reward in respect of the licensee’s performance
against the incentive schemes.
		
	“incentive schemes”	  	means the arrangements set out in special conditions C1, C2, C3 and D2 for adjusting allowed demand revenue and allowed network generation revenue in respect of the licensee’s performance
under those schemes.
		
	“LV units”	  	means units distributed by the licensee to exit points on the licensee’s distribution system at a voltage of less than 1000 volts.
		
	“LV1 units”	  	 means LV units which are distributed by the licensee outside off-peak periods:
  
 (a)      to domestic premises
or small premises (other than domestic premises); and

  

 229 

			
		  	 (b)      in respect of which, the appropriate demand use of system charges apply different rates in off-peak
periods as opposed to other times of day (and, for the avoidance of doubt, such charges include all those specified as falling within the LV1 category in the statements provided by the licensee in accordance with paragraphs 7 and 8 of special
condition E1 (Restriction of distribution charges: supplementary restrictions)).

		
	“LV2 units”	  	means LV units which are distributed by the licensee during off-peak periods to domestic premises or small premises (other than domestic premises) where the appropriate demand use of system
charges are restricted to apply to specified off-peak periods (and, for the avoidance of doubt, such charges include all those items specified as falling within the LV2 category in the statements provided by the licensee in accordance with
paragraphs 7 and 8 of special condition E1 (Restriction of distribution charges: supplementary restrictions)).
		
	“LV3 units”	  	means LV units other than LV1 and LV2 units, for the avoidance of doubt including units distributed under the use of system charges specified as falling within the LV3 category in the
statements provided by the licensee in accordance with paragraphs 7 and 8 of special condition E1 (Restriction of distribution charges: supplementary restrictions).
		
	“metered”	  	means, in relation to any quantity of electricity distributed, as measured by a meter installed for such purpose.
		
	“network generation revenue”	  	means the revenue (measured on an accruals basis) derived by the licensee from generation use of system charges made for the provision of distribution services to owners or operators of
distributed generation in the relevant year, after deduction of:
		
		  	 (a)      an amount equal to such part of the total amount payable in that relevant year to the transmission
licensee (measured on an accruals basis) in respect of transmission connection point charges, transmission use of system charges and remote transmission asset rentals, and which has been recovered from distribution system users in that relevant year
by the licensee in its generation use of system charges, as falls to be attributed to those users in that relevant year;

  

 230 

			
		  	 (b)      an amount equal to such part of the total amount payable in that relevant year to another authorised
distributor (measured on an accruals basis) in respect of charges for the transportation of units from that person’s network, and which would otherwise be included in network generation revenue by reason of being recovered from distribution
system users in that relevant year by the licensee in its generation use of system charges, as falls to be attributed to those users in that relevant year; and

		
		  	 (c)      value added tax (if any) and any other taxes based directly on the
amounts so derived,
  
 and, for the avoidance of doubt, network unavailability rebates or
payments shall be treated as a cost and not a reduction in network generation revenue.

		
	“price control review date”	  	 means the date from which modifications to the charge restriction conditions have effect:
  
 (a)      whether before or
after the date upon which the modifications are made;
  
 (b)      whether or not the same modifications are made in respect of each licensee; and
  
 (c)      where such modifications have been proposed by the Authority following a review by the
Authority of the charge restriction conditions (or that part or parts to which the modifications relate) in relation to all distribution services providers.

		
	“quality of service rigs”	  	for the purposes of special condition C2 only (Calculation of charge restriction adjustments arising from performance in respect of quality of service), means the regulatory instructions and
guidance in force under standard condition 49 (Quality of Service Incentive Scheme and Associated Information).
		
	“registered power zone”	  	means an area which comprises a collection of contiguously connected distribution system assets having one or more terminal points together describing in full the boundary of that area with the
licensee’s distribution system and which has been registered by the Authority as a registered power zone in accordance with special condition D2 (Calculation of charge restriction adjustments arising from the incentive schemes for distributed
generation and registered power zones).
		
	“regulated demand revenue”	  	means the revenue (measured on an accruals basis) derived by the licensee from demand use

  

 231 

			
		  	of system charges made for the provision of distribution services to demand customers in the relevant year, after deduction of:
		
		  	 (a)      an amount equal to such part of the total amount payable in that relevant year to the transmission
licensee (measured on an accruals basis) in respect of transmission connection point charges, transmission use of system charges and remote transmission asset rentals, and which has been recovered from distribution system users in that relevant year
by the licensee in its demand use of system charges, as falls to be attributed to those users in that relevant year;

		
		  	 (b)      an amount equal to such part of the total amount payable in that relevant year to another authorised
distributor (measured on an accruals basis) in respect of charges in respect of units transported from that person’s network, and which would otherwise be included in regulated demand revenue by reason of being recovered from distribution
system users in that relevant year by the licensee in its demand use of system charges, as falls to be attributed to those users in that relevant year; and

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

		
	“relevant year”	  	means a financial year commencing on or after 1 April 1990.
		
	“relevant year t”	  	means that relevant year for the purposes of which any calculation falls to be made under the charge restriction conditions.
		
	“relevant year t-1”	  	means the relevant year immediately preceding relevant year t and similar expressions shall be construed accordingly.
		
	“remote transmission asset rental”	  	means any rent or other periodic payment payable by the licensee to a transmission licensee in respect of remote transmission assets forming part of the licensee’s distribution
system.
		
	“Retail Price Index”	  	 means the general index of retail prices published by the Office for National Statistics each month in respect of all items or:
  
 (a)      if the index in
respect of any month relevant for the purposes of the charge restriction conditions has not been published on or before the last day of February, such price index as the Authority may, after consultation with all holders of a licence in which the
charge restriction conditions have effect, determine to be appropriate; or

  

 232 

			
		  	 (b)      if there is a material change in the basis of the index, such index as the Authority may, after
consultation with all holders of a licence in which the charge restriction conditions have effect, determine to be appropriate.

		
	“RPZ”	  	for the purposes of special condition D2 only (Calculation of charge restriction adjustments arising from the incentive schemes for distributed generation and registered power zones), and
whether on its own or as part of another defined term, means registered power zone.
		
	“small premises”	  	means premises at which a supply of electricity is taken through a non-half-hourly meter, whether for domestic or non-domestic purposes.
		
	“transmission licensee”	  	means the holder of a licence granted or treated as granted under section 6(1)(b) of the Act.
		
	“transmission connection point charges”	  	

means charges which are levied by a transmission licensee as connection charges by direct reference to the number or nature of the connections between the
licensee’s distribution system and the transmission system of that transmission licensee and which are payable by the licensee.
		
	“transmission use of system charges”	  	means charges which are levied by a transmission licensee as use of system charges by direct reference to the export of electricity from the licensee’s distribution system to the
transmission system of that transmission licensee and which are payable by the licensee.
		
	“unit”	  	means a kilowatt hour.
		
	“units distributed”	  	means the aggregate quantity of units distributed by the licensee through its distribution system in relevant year t as measured on leaving that system, whether metered or
unmetered.
		
	“unmetered”	  	in relation to any quantity of electricity entering or leaving the licensee’s distribution system that is not measured by metering equipment, refers to the quantity estimated as so
doing.

  

	5.	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; or 

  

	 	(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. 
  

 233 

	6.	Except where the context otherwise requires: 

  

	 	(a)	any reference in a special condition to a numbered paragraph or appendix (in each case with or without a letter) or to an annex identified by a letter is a reference to the
paragraph, appendix or annex bearing that number or (as the case may be) that letter in the special condition in which the reference occurs; and 

  

	 	(b)	any reference in a special condition to a paragraph is a reference to a paragraph of that special condition and any reference to a sub-paragraph is a reference to a sub-paragraph of
that paragraph. 

  

 234 

 SPECIAL CONDITION A2 – Scope of the charge restriction conditions 
  

	1.	The purpose of this condition is to set out the basis on which services provided by the licensee may be treated as excluded services. 

  

	2.	Excluded services are those services provided by the licensee as part of its distribution business in respect of which such charges as are or may be levied may be treated as falling
outside the scope of the charge restrictions otherwise imposed by or under this licence. 

  

	3.	Subject to paragraph 4, the services which by virtue of this condition are excluded services for the purposes of the charge restriction conditions are those set out in Appendix 1
below (which is part of this condition). 

  

	4.	No service provided by the licensee, within its distribution services area, as part of its distribution business may be treated as an excluded service insofar as it consists of the
provision of services remunerated: 

  

	 	(a)	under charges made for the use of system in accordance with paragraph 2 of standard condition 4A (Charges for Use of System); 

  

	 	(b)	under charges made for the provision of basic metering and data services in accordance with paragraph 1 of standard condition 36C (Basis of Charges for Basic Metering Services and
Data Services: Requirements for Transparency); or 

  

	 	(c)	under charges made for the provision of metering point administration services in accordance with paragraph 2 of standard condition 14A (Basis of Charges for Metering Point
Administration Services: Requirements for Transparency). 

  

	5.	Where the Authority, following consultation with the licensee and having particular regard to paragraph 4 and the matters set out in Appendix 1, is satisfied that any service
treated by the licensee as an excluded service should not be so treated, it may issue a direction to that effect. 

  

	6.	Where a direction is issued under paragraph 5, the service or services specified in the direction shall cease to be treated as excluded services by the licensee from the date of
issue of the direction or such other date as may be specified therein. 

  

 235 

 Appendix 1: Excluded services 
  

	ES1.	The service consisting of the distribution of units: 

  

	 	(a)	to EHV premises that were not connected to the licensee’s distribution system before 1 April 2005; or 

  

	 	(b)	to premises connected before 1 April 2005 that become EHV premises by virtue of having their connection materially altered, subject to the licensee’s agreeing with the
Authority an appropriate offsetting adjustment to the value of PU or PE (being the amount set against that term in the part of Annex A of special condition B1 (Restriction of distribution charges: demand use of system charges) that applies to the
licensee) as appropriate. 

  

	ES2.	The service consisting of the carrying out of works for the provision, installation, operation, repair or maintenance of electric lines or other electrical plant, but only insofar
as such service is not remunerated through use of system charges or under charges made for the provision of basic metering and data services in accordance with paragraph 1 of standard condition 36C (Basis of Charges for Basic Metering Services and
Data Services: Requirements for Transparency) or under charges made for the provision within its distribution services area of metering point administration services in accordance with paragraph 2 of standard condition 14A (Basis of Charges for
Metering Point Administration Services: Requirements for Transparency). 

  

	ES3.	The service consisting of the provision of any revenue protection services pursuant to the terms of an agreement for use of system. 

  

	ES4.	The service consisting of the provision of any statement or report pursuant to: 

  

	 	(a)	paragraph 7 of standard condition 4 (Use of System Charging Methodology); 

  

	 	(b)	paragraph 8 of standard condition 4A (Charges for Use of System); 

  

	 	(c)	paragraph 13 or 15 of standard condition 4B (Connection Charging Methodology); 

  

	 	(d)	paragraph 7 of standard condition 14A (Basis of Charges for Metering Point Administration Services: Requirements for Transparency); or 

  

	 	(e)	paragraph 7 of standard condition 36C (Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency). 

  

	ES5.	The service consisting of the relocation of electric lines or electrical plant (including the carrying out of any works associated therewith) pursuant to any statutory obligation
(other than under section 9(1) or section 16 of the Act) imposed on the licensee. 

  

	ES6.	The service consisting of the moving of any electric lines, electrical plant or meters forming part of the licensee’s distribution system to accommodate the extension, redesign
or redevelopment of any premises on which the same are located or to which they are connected. 

  

 236 

	ES7.	The service consisting of the provision of electric lines and electrical plant insofar as the same are required: 

  

	 	(a)	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 paragraph 1 of standard condition 5 (Distribution System Planning Standard and Quality of
Service). 

  

	ES8.	The service consisting of the transportation of reactive energy to premises with a power factor of less than 0.95, but only insofar as the charges for such services reflect the
costs imposed on the licensee and are levied on the basis of the metered value of kVAr or kVArh transported to such premises. 

  

	ES9.	Any other service in relation to use of the licensee’s distribution system insofar as it consists of the provision of a service (including electric lines or electrical plant)
which is for the specific benefit of any third party who requests it and which is not made available by the licensee as a normal part of its distribution business within its distribution services area remunerated by use of system charges, or under
charges made for the provision of basic metering and data services in accordance with paragraph 1 of standard condition 36C (Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency), or under any other charge in
respect of the excluded services set out in paragraphs ES1 to ES8 and paragraph ES10. 

  

	ES10.	Any provision of a basic metering service (as set out at paragraph 3(b) of standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services)) insofar
as it consists of a service (including any premium in respect of a service provided outside a contractual core time or timeband) that is not incorporated within the calculation of allowed meter operation revenue for the purposes of paragraph 9 of
special condition F1 (Restriction of basic metering charges), or any provision of a metering service other than a basic metering service which is not remunerated by use of system charges or under any other charge in respect of an excluded service
set out in paragraphs ES1 to ES9. 

  

 237 

 SPECIAL CONDITION A3 – Arrangements for the recovery of uncertain costs 
  

	1.	The purposes of this condition are to enable the licensee to propose, and to provide for the Authority to determine, such adjustments to the charge restriction conditions as are
necessary to enable the licensee to recover the efficient costs incurred within the categories of costs described in paragraph 2 pursuant to the licensee’s compliance with obligations or requirements arising under any of the enactments
(“the relevant enactments”) specified in that paragraph. 

  

	2.	The relevant enactments are: 

  

	 	(a)	(subject to paragraph 3) regulations 17 and 18 of the Electricity Safety, Quality and Continuity Regulations 2002 (for which the category of costs is “ESQCR costs”);

  

	 	(b)	any regulations which amend or replace the Electricity Safety, Quality and Continuity Regulations 2002 (for which the category of costs is “new ESQCR costs”);

  

	 	(c)	any regulations made pursuant to section 74A of the New Roads and Street Works Act 1991 (for which the category of costs is “road occupation costs”); and

  

	 	(d)	any order or regulations made pursuant to Part 3 of the Traffic Management Act 2004 which impose a permit scheme (for which the category of costs is “permit scheme
costs”). 

  

	3.	For the purposes of paragraph 2(a), any ESQCR costs incurred by the licensee in complying with any obligations imposed by the relevant enactment to which that paragraph refers that
had previously been an obligation of the licensee under the Electricity Supply Regulations 1988 (including, in particular, costs incurred under regulation 18 for the purposes of averting immediate danger to the public) are to be disregarded for the
purposes of paragraph 4. 

  

	4.	Subject to the provisions of paragraphs 6 and 7, where the licensee reasonably believes that its efficiently incurred costs in any one or more relevant years of complying with
obligations or requirements arising under any of the relevant enactments are, or are likely to be, a material amount, the licensee may, by notice to the Authority, propose a relevant adjustment to the charge restriction conditions.

  

	5.	A relevant adjustment under paragraph 4 is one which, in the opinion of the licensee, would, if made, have the effect of enabling the licensee to recover the efficient costs
incurred or likely to be incurred in relation to the obligations or requirements referred to in that paragraph. 

  

	6.	The licensee may not propose a relevant adjustment under paragraph 4: 

  

	 	(a)	in respect of any costs of whatever description incurred in any relevant year before the year commencing 1 April 2005; and 

  

	 	(b)	in respect of ESQCR costs, before 1 April 2008. 

  

	7.	The licensee may propose a relevant adjustment under paragraph 4 on or after 1 April 2005 in relation to any of the following costs incurred, or likely to be incurred, after
that date: 

  

	 	(a)	new ESQCR costs; 

  

	 	(b)	road occupation costs; and 

  

	 	(c)	permit scheme costs. 

  

	8.	A notice served by the licensee in accordance with paragraph 4 must:  

  

	 	(a)	state the obligations or requirements to which the notice relates; 

  

 238 

	 	(b)	set out by reference to each such obligation or requirement the basis on which the licensee has calculated the relevant adjustment; and 

  

	 	(c)	state the date from which the licensee wishes the Authority to agree that the relevant adjustment shall have effect (“the adjustment date”) (which in the case of ESQCR
costs may not be a date earlier than 1 April 2008). 

  

	9.	Where the licensee serves a notice under paragraph 4, the Authority:  

  

	 	(a)	following consultation with the licensee; 

  

	 	(b)	having particular regard to the purposes of this condition; and 

  

	 	(c)	taking no account of the financial performance of the licensee relative to any of the assumptions, whether express or implied, by reference to which the charge restriction
conditions may have been framed, 

 may, within four months of receiving such notice, determine the relevant adjustment to the
charge restriction conditions in such manner as it considers appropriate. 
  

	10.	If the Authority has not determined the relevant adjustment within four months of receiving a notice from the licensee under paragraph 4, and such a notice has not been withdrawn,
the licensee may give notice to the Authority that the relevant adjustment shall take effect from the adjustment date for all relevant purposes under the charge restriction conditions. 

  

	11.	A “material amount” within the meaning of paragraph 4 is an amount which exceeds, or is likely to exceed, 1 per cent of base demand revenue for the relevant year
commencing 1 April 2005, as determined in accordance with paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges). 

  

	12.	A relevant adjustment proposed in accordance with paragraph 4 may – so long as the requirements of paragraphs 6 and 7 are satisfied – be framed on the basis of a material
amount that has been calculated: 

  

	 	(a)	by reference to only one of the categories of cost described in paragraph 2; or 

  

	 	(b)	by reference to more than one of those categories (in which case, it shall be a material amount for the purposes of each relevant category). 

  

	13.	For the purposes of this condition: 

  

	 	(a)	the power of the Authority to determine a relevant adjustment in accordance with paragraph 9 is a power to confirm, reject or vary the relevant adjustment proposed by the licensee
under paragraph 4; 

  

	 	(b)	without prejudice to sub-paragraph (a), in determining a relevant adjustment to the charge restriction conditions the Authority may include in its determination such adjustments as
it thinks fit in respect of costs likely to be incurred by the licensee in subsequent relevant years within the category of costs to which the relevant adjustment applies; 

  

	 	(c)	where the Authority’s determination or an adjustment made by the licensee under paragraph 10 has the effect of adjusting the charge restriction conditions in relation to any
relevant year (other than through the normal operation of the correction factor, being the term KDt derived in
accordance with paragraph 5 of special condition B1 (Restriction of demand charges: demand use of system charges)), the licensee may not propose any additional relevant adjustment in respect of the same category of costs in that year;

  

 239 

	 	(d)	references to the Traffic Management Act 2004 are to be interpreted as, in relation to Scotland, references to the Transport (Scotland) Bill as enacted; and

  

	 	(e)	the total amount of any relevant adjustment or adjustments in respect of any relevant year t, whether determined by the Authority or made by the licensee under this condition,
shall, where it can be reasonably so construed, be taken to comprise the amount of the term UNCt determined for the
purposes of special condition B2 (Restriction of distribution charges: allowed pass-through items). 

  

 240 

 SPECIAL CONDITION A4 – Duration of the charge restriction conditions 
  

	1.	The purpose of this condition is to set out the process for a disapplication of the charge restriction conditions in whole or in part. 

  

	2.	Special conditions B1 to F1 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 3 and: 

  

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

  

	 	(b)	the application of those conditions (in whole or in part) is terminated by notice given by the licensee in accordance with either paragraph 5 or paragraph 6.

  

	3.	A disapplication request pursuant to this condition shall: 

  

	 	(a)	be in writing addressed to the Authority; 

  

	 	(b)	specify those of the charge restriction conditions (or any part or parts thereof) to which the request relates; and 

  

	 	(c)	state the date (being not earlier than the date specified in paragraph 4) from which the licensee wishes the Authority to agree that the specified charge restriction conditions
shall cease to have effect (“the disapplication date”). 

  

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

  

	 	(a)	in respect of special conditions B1 to E1: 

  

	 	(i)	a date not less than six months after the delivery of the disapplication request, and 

  

	 	(ii)	1 April 2010; or 

  

	 	(b)	in respect of special condition F1: 

  

	 	(i)	a date not less than three months after the delivery of the disapplication request, and 

  

	 	(ii)	1 July 2005. 

  

	5.	Where, for a disapplication request in respect of special conditions B1 to E1, the Authority has not done both of the following:  

  

	 	(a)	given notice to the licensee that it intends to make a reference to the Competition Commission under section 12 of the Act relating to the modification of special conditions B1 to
E1 (or any part or parts thereof) within the later of: 

  

	 	(i)	three months of receiving a disapplication request, and 

  

	 	(ii)	before the beginning of the six-month period that ends with the disapplication date; and 

  

	 	(b)	made such a reference within six months of giving such notice, 

 the licensee may give 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. 
  

	6.	Where, for a disapplication request in respect of special condition F1, the Authority has not done both of the following: 

  

	 	(a)	given notice to the licensee that it intends to make a reference to the Competition Commission under section 12 of the Act relating to the modification of special condition F1
within three months of receiving a disapplication request; and 

  

 241 

	 	(b)	made such a reference within three months of giving such notice, 

 the licensee may give notice to the Authority terminating the application of special condition F1 (or any part or parts thereof as are specified in the disapplication request) with effect from the disapplication date or a later date.

  

	7.	If the Competition Commission’s 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 does not include a conclusion that the cessation of such 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 notice terminating the application of such conditions (or part or parts thereof) with effect from the disapplication date or later.

  

	8.	A disapplication request or notice served under this condition may be served in respect of a specified geographic area. 

  

 242 

 SPECIAL CONDITION B1 – Restriction of distribution charges: demand use of system charges 
  

	1.	The purposes of this condition are to establish the charge restrictions that determine the level of allowed demand revenue that may be recovered from demand use of system charges by
the licensee and to set out the obligation of the licensee in respect of those restrictions. 

 Restriction on setting
demand use of system charges 
  

	2.	The licensee, in setting its demand use of system charges, shall take all appropriate steps within its power to ensure that, in the relevant year t, combined distribution network
revenue does not exceed combined allowed distribution network revenue. 

 Formula for allowed demand revenue (ADt) 
  

	3.	Allowed demand revenue shall be calculated in accordance with the following formula: 

 

 
 where: 
  

			
	ADt	  	means allowed demand revenue in the relevant year t.
		
	BRt	  	means the amount of base demand revenue in the relevant year t calculated in accordance with the formula set out in paragraph 4.
		
	PTt	  	means the revenue adjustment, whether of a positive or negative value, made in the relevant year t in respect of allowed pass-through items as derived in accordance with special condition B2
(Restriction of distribution charges: allowed pass-through items).
		
	IPt	  	means the total amount of incentive revenue, whether of a positive or negative value, calculated for the relevant year t in accordance with special condition B3 (Restriction of distribution
charges: total incentive revenue adjustment).
		
	KDt	  	means the correction factor, whether of a positive or negative value, calculated for the relevant year t in accordance with the formula set out in paragraph 5.

 Formula for base demand revenue (BRt) 
  

	4.	For the purposes of paragraph 3, BRt is derived
from the following formula: 

 

 
 where: 
  

			
	PU	  	means the amount set against that term in the part of Annex A that applies to the licensee, and represents the revenue allowance determined by the Authority in relation to the distribution of
electricity to LV and HV premises at the time that the allowance was established.
		
	PE	  	means the amount set against that term in the part of Annex A that applies to the licensee, and represents the revenue allowance determined by the Authority in relation to the distribution of
electricity to EHV premises at the time that the allowance was established.

  

 243 

			
	GRt	  	is the growth term, and in the relevant year commencing 1 April 2005 has the value of 1 and then in the relevant year commencing 1 April 2006 and each subsequent relevant year is
derived from the following formula:

 

 
 where: 
  

			
	S	  	means the summation across all distribution unit categories i as described in the definition of the term P0i.
		
	P0i	  	means, in respect of each distribution unit category i set out against the licensee’s name in Annex B, the corresponding value of P0 that applies in respect of that category.
		
	Dit	  	means the total number of units distributed in the relevant year t to premises directly connected to the distribution system of the licensee within its distribution services area which fall
within the relevant distribution unit category i.
		
	Ct	  	means the number of energised or de-energised exit points on the licensee’s distribution system in the relevant year t, for which there is a valid metering point administration number,
as calculated on 30 September of that year.
		
	PIADt	  	is the price index adjuster, which in the relevant year commencing 1 April 2005 has the value of 1 and in each subsequent relevant year is derived from the following formula:

 

 
 where: 
  

			
	RPIt	  	means the percentage change (whether positive or negative) between 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 the relevant year t-2 and the arithmetic average of the Retail Price Index numbers published or determined with respect to the same months in relevant year t-1.
		
	X	  	shall, in relation to the relevant year commencing 1 April 2006 and every subsequent relevant year, take the value of zero, except in respect of EDF Energy Networks (SPN) plc where, in the
relevant year commencing 1 April 2006 and every subsequent relevant year, it shall take the value of -2.
		
	MGt	  	is the merger adjustment, and is derived from the following formula:

 

 
  

 244 

         where: 
  

			
	MRt	  	means the amount set against that term for each relevant year in the part of Annex C that applies to the licensee.
		
	PIAMt	  	in the year commencing 1 April 2001 equals 1 and in all subsequent years is derived from the following formula:

 

 
 Formula for the correction factor (KDt) 
  

	5.	For the purpose of paragraph 3, KDt is derived,
subject to paragraph 4 of special condition E1 (Charge restriction conditions: supplementary restrictions), from the following formula: 

 

 
 where: 
  

			
	RDt-1	  	means the regulated demand revenue in the relevant year t-1, except in the relevant year commencing 1 April 2005 where RDt-1 shall be the amount of distribution revenue (as defined in
special condition A (Definitions and interpretation), or in Scotland special condition B, of this licence in the form in which it was in force at 31 March 2005 and, for the avoidance of doubt, excluding EHV revenues) recovered by the licensee
in the relevant year commencing 1 April 2004.
		
	ADt-1	  	means allowed demand revenue in the relevant year t-1, except in the relevant year commencing 1 April 2005 where ADt-1 shall be derived from the following formula:

 

 
         where: 
  

			
	Mdt-1	  	means the maximum average charge per unit distributed in the relevant year commencing 1 April 2004 arising from the application of the formula in paragraph 1 of special condition B
(Restriction of distribution charges), or in Scotland special condition C, of this licence in the form in which it was in force at 31 March 2005.
		
	Dt-1	  	means the regulated quantity distributed in the relevant year commencing 1 April 2004, calculated in accordance with special condition A (Definitions and interpretation), or in Scotland
special condition B (Definitions), of this licence in the form in which it was in force at 31 March 2005.

  

			
	It	  	means the average specified rate (as defined under those words in special condition A1 (Definitions and interpretation)) in the relevant year t.
		
	PRt	  	means the rate of interest that is applicable in accordance with paragraph 2 of special condition E1 (Charge restriction conditions: supplementary restrictions).

  

 245 

 Annex A: Values for PU and PE by licensee 
  

					
	 Licensee
	  	PU (£m)	  	PE (£m)
	 Central Networks West plc
	  	255.7	  	2.8
	 Central Networks East plc
	  	257.7	  	3.5
	 United Utilities Electricity plc
	  	235.4	  	4.1
	 Northern Electric Distribution Limited
	  	158.2	  	7.2
	 Yorkshire Electricity Distribution plc
	  	213.9	  	3.8
	 Western Power Distribution (South West) plc
	  	188.5	  	1.7
	 Western Power Distribution (South Wales) plc
	  	148.5	  	6.8
	 EDF Energy Networks (LPN) plc
	  	236.9	  	4.1
	 EDF Energy Networks (SPN) plc
	  	167.9	  	7.2
	 EDF Energy Networks (EPN) plc
	  	304.7	  	6.0
	 SP Distribution Limited
	  	313.7	  	0.6
	 SP Manweb plc
	  	179.3	  	7.6
	 Scottish Hydro-Electric Power Distribution Limited
	  	179.2	  	1.8
	 Southern Electric Power Distribution plc
	  	353.9	  	6.8

  

 246 

 Annex B: Values for P0 weights by licensee 
 Central Networks West plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.0397
	 LV2
	  	0.1220
	 LV3
	  	0.9286
	 HV
	  	0.2503

 Central Networks East plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	0.7512
	 LV2
	  	0.1680
	 LV3
	  	0.5537
	 HV
	  	0.1960

 United Utilities Electricity plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.8789
	 LV2
	  	0.2104
	 LV3
	  	1.4180
	 HV
	  	0.6297

 Northern Electric Distribution Limited 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.0512
	 LV2
	  	0.1100
	 LV3
	  	0.8205
	 HV
	  	0.1580

 Yorkshire Electricity Distribution plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	0.7700
	 LV2
	  	0.1200
	 LV3
	  	0.6025
	 HV
	  	0.1750

  

 247 

 Western Power Distribution (South West) plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.8800
	 LV2
	  	0.4100
	 LV3
	  	1.2734
	 HV
	  	0.2350

 Western Power Distribution (South Wales) plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.8600
	 LV2
	  	0.2700
	 LV3
	  	1.3852
	 HV
	  	0.2415

 EDF Energy Networks (LPN) plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.0970
	 LV2
	  	0.1360
	 LV3
	  	0.6988
	 HV
	  	0.2580

 EDF Energy Networks (SPN) plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	0.7456
	 LV2
	  	0.0929
	 LV3
	  	0.5076
	 HV
	  	0.2376

 EDF Energy Networks (EPN) plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.0252
	 LV2
	  	0.3010
	 LV3
	  	0.9072
	 HV
	  	0.2503

 SP Distribution Limited 
  

			
	 Unit category i
	  	P0
	 LV1
	  	2.7442
	 LV2
	  	0.6794
	 LV3
	  	1.8388
	 HV
	  	0.7426

  

 248 

 SP Manweb plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.8699
	 LV2
	  	0.6016
	 LV3
	  	1.4532
	 HV
	  	0.6020

 Scottish Hydro-Electric Power Distribution Limited 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.8824
	 LV2
	  	0.8819
	 LV3
	  	1.9542
	 HV
	  	0.4900

 Southern Electric Power Distribution plc 
  

			
	 Unit category i
	  	P0
	 LV1
	  	1.2118
	 LV2
	  	0.1806
	 LV3
	  	1.0334
	 HV
	  	0.2842

  

 249 

 Annex C: Values for MR by licensee 
 Central Networks West plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	3.124
	 1 April 2006
	  	3.124
	 1 April 2007
	  	3.124
	 1 April 2008
	  	3.124
	 1 April 2009
	  	0.000

 thereafter zero 
 Central Networks East plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	3.276
	 1 April 2006
	  	3.276
	 1 April 2007
	  	3.276
	 1 April 2008
	  	3.276
	 1 April 2009
	  	0.000

 thereafter zero 
 United Utilities Electricity plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
 Northern Electric Distribution Limited 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
  

 250 

 Yorkshire Electricity Distribution plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
 Western Power Distribution (South West) plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
 Western Power Distribution (South Wales) plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
 EDF Energy Networks (LPN) plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	1.920
	 1 April 2006
	  	1.920
	 1 April 2007
	  	1.920
	 1 April 2008
	  	0.000
	 1 April 2009
	  	0.000

 thereafter zero 
  

 251 

 EDF Energy Networks (SPN) plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	1.703
	 1 April 2006
	  	1.703
	 1 April 2007
	  	1.703
	 1 April 2008
	  	0.000
	 1 April 2009
	  	0.000

 thereafter zero 
 EDF Energy Networks (EPN) plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	2.777
	 1 April 2006
	  	2.777
	 1 April 2007
	  	2.777
	 1 April 2008
	  	0.000
	 1 April 2009
	  	0.000

 thereafter zero 
 SP Distribution Limited 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
 SP Manweb plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
  

 252 

 Scottish Hydro-Electric Power Distribution Limited 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
 Southern Electric Power Distribution plc 
 MRt (£m) 
  

			
	 1 April 2005
	  	0.00
	 1 April 2006
	  	0.00
	 1 April 2007
	  	0.00
	 1 April 2008
	  	0.00
	 1 April 2009
	  	0.00

 thereafter zero 
  

 253 

 SPECIAL CONDITION B2 – Restriction of distribution charges: allowed pass-through items 
  

	1.	The purpose of this condition is to provide for adjustments to the charge restriction conditions to reflect certain costs that can be passed through to demand customers of the
licensee through allowed demand revenue. 

 Formula for allowed pass-through items (PTt) 

 

	2.	For the purposes of paragraph 3 of special condition B1 (Restriction of distribution charges: demand use of system charges), PTt is derived from the following formula: 

 PTt = LFt + RBt – HBt + MPTt + UNCt 
 where: 
  

			
	LFt	  	means an amount (whether positive or negative), as derived from the formula set out in paragraph 3, representing a licence fee adjustment.
		
	RBt	  	means an amount (whether positive or negative), as derived from the formula set out in paragraph 4, representing a business rates adjustment.
		
	HBt	  	means the amount received by the licensee, arising from any direction given by the Secretary of State in accordance with section 184 of the Energy Act 2004 in relation to assistance for
high-cost distributors.
		
	MPTt	  	means an amount (whether positive or negative), as derived from the formula set out in paragraph 5, representing an adjustment for other pass-through items.
		
	UNCt	  	means an amount in the relevant year t representing a relevant adjustment to the charge restriction conditions arising from the application of special condition A3 (Arrangements for the
recovery of uncertain costs).

 Formula for the licence fee adjustment (LFt) 
  

	3.	For the purposes of paragraph 2, LFt is an
amount calculated in accordance with the following formula: 

  

			
		  	LFt = LPt – LAt
		
		  	where:
		
	LPt	  	is an amount in respect of licence fee payments, and means the amount equal to the payments made by the licensee, in the relevant year t, in accordance with its obligations set out in
standard condition 3 (Payments by Licensee to the Authority).
		
	LAt	  	is the amount of the licence fee payments allowance, and is derived from the following formula:
		
		  	LAt = PF x PIABt
		
		  	where:

  

 254 

			
	PF	 	is the amount of the licence fee payments allowance in 2002/03 prices, and is represented by the amount given in the table appearing under that term in the part of Annex A that applies to the
licensee.
		
	PIABt	 	is the price index adjustment, and in the relevant year commencing 1 April 2002 shall take the value of 1 and in each subsequent relevant year shall be derived from the following
formula:

 

 
 where RPIt is determined in accordance with paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges). 
 Formula for the business rates adjustment (RBt) 
  

	4.	For the purposes of paragraph 2, RBt is
calculated in accordance with the following formula: 

 RBt = RPt –
RAt 
 where: 
  

			
	RPt	 	is the amount payable by the licensee in respect of business rates.
		
	RAt	 	is the business rates allowance, and is derived from the following formula:

 RAt = RVt x PIABt 
 where: 
  

			
	RVt	  	is the business rates allowance in 2002/03 prices, and is represented by the amount set against that term for each relevant year in the part of Annex B that applies to the
licensee.
		
	PIABt	  	shall in the relevant year commencing 1 April 2002 take the value of 1 and in each subsequent relevant year shall be derived from the formula set out in paragraph 3.

 Formula for other pass-through items (MPTt) 
  

	5.	For the purposes of paragraph 2, MPTt is
calculated in accordance with the following formula: 

 MPTt = MPCt x MPAt 
 where: 
  

			
	MPCt	  	is the amount payable by the licensee in respect of costs incurred by the licensee in the relevant year t for items which the licensee considers should be treated as miscellaneous
pass-through items not reflected in the term MPAt and which have been directed by the Authority to be so treated following consultation with the licensee.

  

 255 

			
	MPAt	 	is the amount of allowed pass-through relating to settlement run-off costs and Shetland balancing costs, and is derived from the following formula:

 MPAt = SRSt x SAt 
 where: 
  

			
	SRSt	 	means the allowance for settlement run-off costs in relation to the transition to BETTA and in the relevant year commencing 1 April 2005 shall be calculated in accordance with the
following formula, and in each subsequent relevant year thereafter shall take the value of zero:

 SRSt = (1998costs + SOC) xPIASt 
 where: 
  

			
	1998 costs	  	means an amount in respect of unrecovered 1998-related settlement costs, being that amount which:
		
		  	 (i)       subject to the BETTA go-live date being 1 April 2005, is the amount set against the
licensee’s name in Part 1 of Annex C; or

		
		  	 (ii)      where the BETTA go-live date is after 1 April 2005, is such an amount, not being more than the
amount set against the licensee’s name in Part 1 of Annex C, as may be directed by the Authority following consultation with the licensee.

		
	SOC	  	means the ongoing operating expenditure associated with settlement run-off costs in respect of the Settlement Agreement for Scotland, and in the relevant year commencing 1 April 2005 shall be
the amount set against the licensee’s name in Part 1 of Annex C.
		
	PIASt	  	is the price index adjustment, and in the relevant year commencing 1 April 2004 shall take the value of 1 and in each subsequent relevant year shall be derived from the following
formula:

 

 
  

			
	SAt	 	means the allowance for Shetland balancing costs, and is the amount derived under the formula for that term set out in Part 2 of Annex C with respect to Scottish Hydro Electric Power
Distribution Limited, and for every other licensee is zero.

  

 256 

 Annex A: Values for PF by licensee 
  

			
	 Licensee
	  	PF (£m)
	 Central Networks West plc
	  	1.1
	 Central Networks East plc
	  	1.1
	 United Utilities Electricity plc
	  	1.1
	 Northern Electric Distribution Limited
	  	0.7
	 Yorkshire Electricity Distribution plc
	  	1.0
	 Western Power Distribution (South West) plc
	  	0.7
	 Western Power Distribution (South Wales) plc
	  	0.5
	 EDF Energy Networks (LPN) plc
	  	1.0
	 EDF Energy Networks (SPN) plc
	  	1.0
	 EDF Energy Networks (EPN) plc
	  	1.6
	 SP Distribution Limited
	  	0.9
	 SP Manweb plc
	  	0.7
	 Scottish Hydro-Electric Power Distribution Limited
	  	0.3
	 Southern Electric Power Distribution plc
	  	1.3

  

 257 

 Annex B: Values for RVt by licensee 
 Central Networks West plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	22.2
	 1 April 2006
	  	21.1
	 1 April 2007
	  	20.5
	 1 April 2008
	  	20.5
	 1 April 2009
	  	20.5

 thereafter 20.5 
 Central Networks East plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	21.8
	 1 April 2006
	  	25.6
	 1 April 2007
	  	27.4
	 1 April 2008
	  	27.4
	 1 April 2009
	  	27.4

 thereafter 27.4 
 United Utilities Electricity plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	18.3
	 1 April 2006
	  	17.4
	 1 April 2007
	  	17.3
	 1 April 2008
	  	17.3
	 1 April 2009
	  	17.3

 thereafter 17.3 
 Northern Electric Distribution Limited 
 RVt (£m) 
  

			
	 1 April 2005
	  	11.9
	 1 April 2006
	  	13.7
	 1 April 2007
	  	13.7
	 1 April 2008
	  	13.7
	 1 April 2009
	  	13.7

 thereafter 13.7 
  

 258 

 Yorkshire Electricity Distribution plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	20.5
	 1 April 2006
	  	19.5
	 1 April 2007
	  	18.5
	 1 April 2008
	  	18.4
	 1 April 2009
	  	18.4

 thereafter 18.4 
 Western Power Distribution (South West) plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	14.4
	 1 April 2006
	  	16.9
	 1 April 2007
	  	18.2
	 1 April 2008
	  	18.2
	 1 April 2009
	  	18.2

 thereafter 18.2 
 Western Power Distribution (South Wales) plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	10.9
	 1 April 2006
	  	12.8
	 1 April 2007
	  	13.9
	 1 April 2008
	  	13.9
	 1 April 2009
	  	13.9

 thereafter 13.9 
 EDF Energy Networks (LPN) plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	18.1
	 1 April 2006
	  	21.2
	 1 April 2007
	  	23.3
	 1 April 2008
	  	23.3
	 1 April 2009
	  	23.3

 thereafter 23.3 
  

 259 

 EDF Energy Networks (SPN) plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	14.2
	 1 April 2006
	  	13.4
	 1 April 2007
	  	12.8
	 1 April 2008
	  	10.9
	 1 April 2009
	  	7.0

 thereafter 7.0 
 EDF Energy Networks (EPN) plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	24.5
	 1 April 2006
	  	25.9
	 1 April 2007
	  	25.9
	 1 April 2008
	  	25.9
	 1 April 2009
	  	25.9

 thereafter 25.9 
 SP Distribution Limited 
 RVt (£m) 
  

			
	 1 April 2005
	  	28.4
	 1 April 2006
	  	33.4
	 1 April 2007
	  	33.4
	 1 April 2008
	  	33.4
	 1 April 2009
	  	33.4

 thereafter 33.4 
 SP Manweb plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	14.3
	 1 April 2006
	  	13.5
	 1 April 2007
	  	12.9
	 1 April 2008
	  	11.7
	 1 April 2009
	  	11.7

 thereafter 11.7 
  

 260 

 Scottish Hydro-Electric Power Distribution Limited 
 RVt (£m) 
  

			
	 1 April 2005
	  	9.5
	 1 April 2006
	  	11.2
	 1 April 2007
	  	13.2
	 1 April 2008
	  	14.7
	 1 April 2009
	  	14.7

 thereafter 14.7 
 Southern Electric Power Distribution plc 
 RVt (£m) 
  

			
	 1 April 2005
	  	30.2
	 1 April 2006
	  	35.5
	 1 April 2007
	  	38.0
	 1 April 2008
	  	38.0
	 1 April 2009
	  	38.0

 thereafter 38.0 
  

 261 

 Annex C: Values in relation to MPAt 
 Part 1 
  

					
	 Licensee
	  	1998 costs
(£m)	  	SOC
(£m)
	 Central Networks West plc
	  	0.00	  	0.000
	 Central Networks East plc
	  	0.00	  	0.000
	 United Utilities Electricity plc
	  	0.00	  	0.000
	 Northern Electric Distribution Limited
	  	0.00	  	0.000
	 Yorkshire Electricity Distribution plc
	  	0.00	  	0.000
	 Western Power Distribution (South West) plc
	  	0.00	  	0.000
	 Western Power Distribution (South Wales) plc
	  	0.00	  	0.000
	 EDF Energy Networks (LPN) plc
	  	0.00	  	0.000
	 EDF Energy Networks (SPN) plc
	  	0.00	  	0.000
	 EDF Energy Networks (EPN) plc
	  	0.00	  	0.000
	 SP Distribution Limited
	  	2.76	  	0.345
	 SP Manweb plc
	  	0.00	  	0.000
	 Scottish Hydro-Electric Power Distribution Limited
	  	1.24	  	0.155
	 Southern Electric Power Distribution plc
	  	0.00	  	0.000

  

 262 

 Part 2 
  

	1.	This Part 2 of Annex C applies solely to Scottish Hydro-Electric Power Distribution Limited. 

 SAt = TPCt + LPSFt + EPt – SHt – SHBt 
 where: 
  

			
	TPCt	 	means the amount representing the annual cost of contracts with third party generators for supplying demand customers in Shetland for the relevant year t.
		
	LPSFt	 	means the amount representing the cost of fuel purchased for use by Lerwick Power Station (LPS) in relevant year t.
		
	LPSCt	 	means the capital and operating cost allowance for LPS in relevant year t calculated as follows:

 LPSCt = LPSA x PIAHt 
 where: 
  

			
	LPSA	 	is the capital and operating cost allowance for LPS in respect of each relevant year and takes the value of £5.2 million.
		
	PIAHt	 	is the price index adjustment term in the relevant year t, which in the relevant year commencing 1 April 2002 has the value of 1 and thereafter is given by the following
formula:

 

 
  

			
	EPt	 	means the cost of environmental permits in respect of generation on Shetland in relevant year t.
		
	SHt	 	means the income from units purchased by suppliers in respect of generation on Shetland for the relevant year t.
		
	SHBt	 	means the amount of the allowance assumed in setting PU and PE in special condition B1 (Restriction of distribution charges: demand use of system charges), which is derived from the following
formula:

 SHBt = SHA x PIAHt 
 where: 
  

			
	SHA	 	is the allowance assumed in setting PU and PE in 2002/03 prices and takes the value of £7 million.

  

 263 

 SPECIAL CONDITION B3 – Restriction of distribution charges: total incentive revenue adjustment 
  

	1.	The purpose of this condition is to establish the total amount of incentive payment that adjusts allowed demand revenue to reflect the performance of the licensee with respect to
the following incentive schemes: 

  

	 	(a)	the distribution losses incentive scheme provided for under special condition C1 (Calculation of charge restriction adjustments arising from the distribution losses incentive
scheme); 

  

	 	(b)	the quality of service incentive scheme established pursuant to standard condition 49 (Quality of Service Incentive Scheme and Associated Information), also taking account of other
aspects of quality of service performance provided for under special condition C2 (Calculation of charge restriction adjustments arising from performance in respect of quality of service); and 

  

	 	(c)	the innovation funding incentive scheme established pursuant to standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding
and Registered Power Zones). 

 Formula for incentive revenue (IPt) 
  

	2.	For the purposes of paragraph 3 of special condition B1 (Restriction of distribution charges: demand use of system charges), IPt is derived in accordance with the following formula: 

 IPt = ILt + IQt + IFIt 
 where:

  

			
	ILt	 	is the distribution losses incentive adjustment, and in the relevant year t is derived in accordance with the formula set out in paragraph 2 of special condition C1 (Calculation of charge
restriction adjustments arising from the distribution losses incentive scheme).
		
	IQt	 	is the quality of service incentive adjustment and in the relevant year t is derived from the formula set out in paragraph 2 or 3, as appropriate, of special condition C2 (Calculation of
charge restriction adjustments arising from performance in respect of quality of service).
		
	IFIt	 	is the innovation funding incentive adjustment and in the relevant year t is derived from the formula set out in paragraph 2 of special condition C3 (Calculation of charge restriction
adjustments arising from the innovation funding incentive scheme).

  

 264 

 SPECIAL CONDITION C1 – Calculation of charge restriction adjustments arising from the distribution losses
incentive scheme 
  

	1.	The purpose of this condition is to establish the amount of incentive that adjusts allowed demand revenue so as to reflect the performance of the licensee under the scheme set out
below in respect of distribution losses. 

 Formula for the losses incentive adjustment (ILt) 
  

	2.	For the purposes of paragraph 2 of special condition B3 (Restriction of distribution charges: total incentive revenue adjustment), ILt is calculated in accordance with the following formula: 

 

 
 where: 
  

			
	LR	  	is the distribution losses incentive rate and takes the value of £48/MWh for units physically distributed on or after 1 April 2005.
		
	PLR	  	is the previous distribution losses incentive rate and takes the value of £32.24/MWh for units physically distributed before 1 April 2005.
		
	PIALt	  	is the price index adjustment, which in the relevant year commencing 1 April 2004 takes the value of 1, and in each subsequent relevant year is derived from the following
formula:

 

 
  

			
	Lt	  	means, in respect of the relevant year t, the adjusted distribution losses calculated in accordance with the methodological basis set out in paragraphs 3 to 5 and 9.
		
	ALt	  	means an amount representing the benchmark level of distribution losses in the relevant year t calculated, subject to paragraphs 6 to 8 below, in accordance with the following
formula:

 

 
 where: 
  

			
	ALP	  	is the allowed loss percentage and shall, unless the Authority has directed otherwise in accordance with paragraph 7, take the value set against the licensee’s name for the relevant year
t in Annex A.
		
	AUDt	  	means, in respect of the relevant year t, the adjusted units distributed as defined in paragraph 5.

  

			
		
	PVLt	  	means the number of units distributed recorded by the licensee, in respect of the relevant year t, that were physically delivered before 1 April 2005, and where the adjustment may be positive
or negative.
		
	RPIt	  	is determined in accordance with paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges).

  

 265 

 Basis of calculation of adjusted distribution losses (Lt) 
  

	3.	Adjusted distribution losses shall be deemed to be the difference between adjusted system entry volumes and adjusted units distributed. 

  

	4.	Adjusted system entry volumes shall be equal to the sum of: 

  

	 	(a)	all units metered on entering the licensee’s distribution system; 

  

	 	(b)	all units deemed to be entering the licensee’s distribution system by entry points that are unmetered; and 

  

	 	(c)	an amount (in units) representing the excess adverse effect on losses (DGAt) of units entering the system at entry points (other than entry points which are connected to an onshore transmission network) where the loss adjustment factor applied for settlement purposes is less
than 0.997, as calculated by the following formula: 

 

 
 where: 
 LAFit = min(LAGit,0.997) 
  

			
	DGVit	  	is the total number of units, in respect of the relevant year t, entering the distribution system at entry point i; and
		
	LAGit	  	is the value, in the relevant year t, of the loss adjustment factor applicable to entry point i.

  

	5.	Adjusted units distributed shall be equal to: 

  

	 	(a)	the sum of: 

  

	 	(i)	all units distributed by the licensee metered at exit points on leaving the licensee’s distribution system, and 

  

	 	(ii)	all units deemed to be leaving the licensee’s distribution system at exit points that are unmetered; 

  

	 	(b)	but excluding: 

  

	 	(i)	the units, whether metered or unmetered, recorded as distributed by the licensee and that were physically delivered before 1 April 2005, and 

  

	 	(ii)	in respect of Scottish Hydro-Electric Power Distribution Limited, also those units deemed to be leaving the licensee’s distribution system at shared unmetered exit points.

  

	6.	Subject to paragraph 7, the value of ALP set against the licensee’s name in Annex A shall apply so long as this condition continues in force. 

  

 266 

	7.	The Authority, having due regard to the purpose of this condition, and being satisfied, following consultation with the licensee, that there has been a material change (whether an
improvement or a deterioration) in the quality of the information used to derive the adjusted system entry volumes or adjusted units distributed, may, with the licensee’s consent (which shall not be unreasonably withheld), direct the licensee
to change the value of ALP, to which paragraph 6 refers, to a different value specified by the Authority. 

  

	8.	A change to the value of ALP in accordance with paragraph 7 may be directed by the Authority at any time during the year but shall not take effect before the beginning of the
relevant year commencing immediately after the date of the direction. 

  

	9.	The licensee shall, unless otherwise agreed by the Authority, calculate each component of adjusted distribution losses for the relevant year t on the same basis as that used within
the calculation of adjusted distribution losses in respect of the relevant year commencing 1 April 2002, pursuant to paragraph 7 of special condition D (Information to be provided to the Authority in connection with the charge restriction
conditions), or in Scotland special condition E, of this licence in the form in which it was in force on 31 March 2005. 

  

 267 

 Annex A: Value for ALP by licensee 
  

			
	 Licensee
	  	ALP
	 Central Networks West plc
	  	4.96
	 Central Networks East plc
	  	5.69
	 United Utilities Electricity plc
	  	5.68
	 Northern Electric Distribution Limited
	  	5.20
	 Yorkshire Electricity Distribution plc
	  	5.90
	 Western Power Distribution (South West) plc
	  	6.96
	 Western Power Distribution (South Wales) plc
	  	4.94
	 EDF Energy Networks (LPN) plc
	  	6.54
	 EDF Energy Networks (SPN) plc
	  	6.54
	 EDF Energy Networks (EPN) plc
	  	6.32
	 SP Distribution Limited
	  	*
	 SP Manweb plc
	  	**
	 Scottish Hydro-Electric Power Distribution Limited
	  	8.73
	 Southern Electric Power Distribution plc
	  	6.74

	*	For SP Distribution Limited, ALP shall take the value: 

  

	 	i.	5.41 for the relevant year t commencing 1 April 2005 

  

	 	ii.	5.13 for the relevant year t commencing 1 April 2006 and every subsequent relevant year t. 

  

	**	For SP Manweb plc, ALP shall take the value: 

  

	 	i.	5.85 for the relevant year t commencing 1 April 2005 

  

	 	ii.	5.32 for the relevant year t commencing 1 April 2006 and every subsequent relevant year t. 

 {previous figures for SP Distribution and SP Manweb from 1/4/05 are shown below} 
  

			
	 SP Distribution Limited
	  	6.45
	 SP Manweb plc
	  	7.52

  

 268 

 SPECIAL CONDITION C2 – Calculation of charge restriction adjustments arising from performance in respect of
quality of service—SP Manweb plc 
  

	1.	The purposes of this condition are to establish:  

  

	 	(a)	a mechanism to provide for adjustments to the charge restriction conditions to reflect the performance of the licensee in achieving targets for quality of supply;

  

	 	(b)	a mechanism to reward best practice by electricity distributors; and 

  

	 	(c)	a mechanism to make adjustments to allowed demand revenue in relation to the normal and severe weather standards for supply restoration. 

  

	2.	For the purposes of paragraph 2 of special condition B3 (Restriction of distribution charges: total incentive revenue adjustment) in the relevant year commencing on 1 April
2005, IQt is the amount derived from the following formula: 

 

 
 where:  
 Qt-2 and Qt-3 shall each take the value of the respective term set against the licensee’s name in Annex E. 
 Qt-1 , za and zb are
the adjustments to allowed demand revenue to reflect the licensee’s performance in the relevant year commencing 1 April 2004 and shall be calculated from the application of the provisions of special condition G (Incentive scheme:
calculation of charge restriction adjustment) in place for that relevant year. 
 Y is an additional reward for outperformance where the
licensee has failed to meet one of its interruption targets for the relevant year commencing 1 April 2004. 
 If, for the relevant year
commencing 1 April 2004, CIISt is less than or equal to TAt and CMLISt is less than or
equal to TBt , then Y shall be equal to zero. 
 If, for the relevant year commencing 1 April 2004, either CIISt is more than TAt or CMLISt is more than TBt,
then Y shall be the amount derived from the following formula: 
 

 
 where each of the terms and other items in the formula shall be calculated from the application of the
provisions of special condition G (Incentive scheme: calculation of charge restriction adjustment) of this licence in the form in which it was in force for that year. 
 qft is defined as set
out in paragraph 9. 
  

 269 

 qgt is defined as set out in paragraph 10. 
 It means the average specified rate (which is defined under those words in special condition A1 (Definitions and interpretation)) in relevant year t. 

 

	3.	For the purposes of paragraph 2 of special condition B3 (Restriction of distribution charges: total incentive revenue adjustment) in the relevant year commencing on 1 April
2006, IQt shall be the amount derived from the following formula: 

 IQt = qft + qgt 
 In the relevant year commencing on 1 April 2007 and in each subsequent relevant year t, IQt shall be the amount derived from the following formula: 
 

 
 where: 
  

	 	It	means the average specified rate (which is defined under those words in special condition A1 (Definitions and interpretation)) in relevant year t.

  

	4.	For the purposes of paragraphs 3 and 5, and subject to paragraphs 11, 12 and 13: 

  

	 	qat	means the adjustment to allowed demand revenue in respect of performance in relevant year t in relation to the target for the number of customers interrupted per 100
customers in that year and shall be derived from the following formula: 

 

 
 where: 
  

			
	TAt	  	means the target for the number of customers interrupted for the relevant year t specified in the table in Annex A.
		
	CIISt	  	means the performance in respect of the number of customers interrupted in relevant year t and is derived from the formula:

 CIISt = CIAt + (axCIBt)+(bxCICt)+CIDt + (cxCIEt) 
 where: 
  

			
	a	  	takes the value of 0.5 and b and c are zero.
		
	CIAt	  	is the number of customers interrupted per year arising from unplanned incidents on the licensee’s distribution system in the relevant year t and is derived from the formula in Appendix
2 of the quality of service rigs.

  

 270 

			
	CIBt	  	is the number of customers interrupted per year arising from pre-arranged incidents on the licensee’s distribution system in the relevant year t and is derived from the formula in
Appendix 2 of the quality of service rigs.
		
	CICt	  	is the number of customers interrupted per year arising from incidents on the systems of the transmission company in the relevant year t and is derived from the formula in Appendix 2 of the
quality of service rigs.
		
	CIDt	  	is the number of customers interrupted per year arising from incidents on the systems of distributed generators in the relevant year t and is derived from the formula in Appendix 2 of the
quality of service rigs.
		
	CIEt	  	is the number of customers interrupted per year arising from incidents on any other connected systems in the relevant year t and is derived from the formula in Appendix 2 of the quality of
service rigs.
		
	PIAt	  	means the price index adjuster in relevant year t and is derived from the following formula:
		
		  	

		
		  	where, for the relevant year commencing 1 April 2002, PIAt =
1 and RPIt is as determined in accordance with paragraph 4 of special condition B1 (Restriction of distribution
charges: demand use of system charges).
		
	IRAt	  	means the incentive rate for the number of customers interrupted specified for the relevant year t in the table in Annex A, expressed in £ million in 2002/03 prices.
		
	RLA	  	means the maximum percentage of base demand revenue exposed to the number of customers interrupted and has the value of 1.2.
		
		  	BRt    means base demand revenue in the
relevant year t and is as defined in paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges).

  

	5.	For the purposes of paragraph 3, and subject to paragraphs 11, 12 and 13: 

  

	 	qbt	means the adjustment to allowed demand revenue in respect of performance in relevant year t in relation to the target for the duration of customer interruptions in
that year and shall be derived from the following formula: 

 

 
 provided that: 
  
 

 
  

 271 

 and, where that is not the case, shall be determined by the following formula: 
 

 
 where: 

			
	TBt	  	means the target for the duration of customer interruptions for the relevant year t specified in the table in Annex A.
		
	CMLISt	  	means the performance in respect of the duration of customer interruptions in relevant year t and is derived from the formula:

 

 
 where: 
  

			
	d	  	takes the value of 0.5 and e and f each have the value of 0.10.
		
	CMLAt	  	is the duration of interruptions from unplanned incidents on the licensee’s distribution system in the relevant year t and is derived from the formula in Appendix 2 of the quality of
service rigs.
		
	CMLBt	  	is the duration of interruptions from pre-arranged incidents on the distribution system in the relevant year t and is derived from the formula in Appendix 2 of the quality of service
rigs.
		
	CMLCt	  	is the duration of interruptions arising from incidents on the systems of the transmission company in the relevant year t and is derived from the formula in Appendix 2 of the quality of
service rigs.
		
	CMLDt	  	is the duration of interruptions arising from incidents on the systems of distributed generators in the relevant year t and is derived from the formula in Appendix 2 of the quality of service
rigs.
		
	CMLEt	  	is the duration of interruptions arising from incidents on any other connected systems in the relevant year t and is derived from the formula in Appendix 2 of the quality of service
rigs.
		
	IRBt	  	means the incentive rate for the duration of customer interruptions specified for the relevant year t in the table in Annex A expressed in £ million in 2002/03 prices.
		
	PIAt	  	is defined as set out in paragraph 4 above.

  

 272 

			
	 TRL
	  	means the maximum percentage of base demand revenue exposed to penalties under the relevant elements of IQt for the relevant year t and has the value of 4.
		
	 RLB
	  	means the maximum percentage of base demand revenue exposed to the duration of customer interruptions and has the value of 1.8.
		
	 BRt
	  	means base demand revenue in the relevant year t and is as defined in paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system
charges).
		
	 SWEt
	  	is defined as set out in paragraph 9.

  

	6.	For the purposes of paragraphs 3 and 5: 

  

	 	qct	means the adjustment to allowed demand revenue in respect of the severe weather telephony incentive in relevant year t and shall be derived from the following
formula: 

 qct = 0 
  

	7.	For the purposes of paragraphs 3 and 5: 

  

	 	qdt	means the adjustment to allowed demand revenue in respect of overall surveyed performance in relevant year t in relation to the targets for the speed and quality of
telephone response in that year. 

 In relevant year t, if APTRt is greater than or equal to 4.5, qdt shall be the amount derived from the following formula: 
 qdt = 0.0005xBRt 

In relevant year t, if APTRt is greater than or equal to 4.1 and less than 4.5, qdt shall take the value of zero. 
 In relevant year t, if APTRt is less than 4.1, qdt shall be the amount derived from the following formula: 
 

 
 where: 
  

			
	APTRt	  	is the actual overall performance score for the licensee in relevant year t, based on all assessed attributes in the survey of quality and speed of telephone response provided to the
Authority by the company carrying out that survey, as notified by the Authority to the licensee.
		
	IRCt	  	means the penalty rate in the relevant year t for performance in respect of the speed and quality of telephone response and is derived from the following formula:

  

 273 

 

 
 where: 
  

			
	RLD	  	means the maximum percentage of base demand revenue exposed to penalties under the incentives for the quality and speed of telephone response and takes the value of 0.25.
		
	BRt	  	means base demand revenue in the relevant year t and is as defined in paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system
charges).

  

	8.	For the purpose of paragraph 3: 

  

	 	qet	means such positive adjustment (if any) to allowed demand revenue in respect of the discretionary reward scheme for best practice in relation to priority customers,
communication, and corporate social responsibility as may be determined by the Authority. 

  

	9.	For the purposes of paragraphs 2, 3 and 5: 

  

	 	qft	means the adjustment to allowed demand revenue in respect of the standard of performance for supply restoration under severe weather conditions imposed on the
licensee under regulation 6. 

 In relevant year t, qft shall be the amount derived from the following formula:  
 

 
 where: 
  

			
	SWPDt	  	is the total amount of the payments in relevant year t which either have been paid to customers or, where not paid, which customers would have been entitled to claim for the licensee’s
failure to meet the standard of performance for supply restoration under severe weather conditions imposed on the licensee under regulation 6.
		
	SWPMt	  	is the total amount of payments that the licensee has made formally to customers in relevant year t in respect of failure to meet the standard of performance for restoration under severe
weather conditions imposed on the licensee under regulation 6 or that has been paid to customers in the form of ex gratia payments for a severe weather event in relevant year t, and in calculating SWPMt a maximum of £200 of payments per customer for any given event in relevant year t may be taken into account.
		
	RLE	  	means the maximum percentage of base demand revenue exposed to the severe weather arrangements for relevant year t and has the value of 2.

  

 274 

			
	SWEt	  	means the licensee’s total exposure to the severe weather arrangements in relevant year t and shall be derived from the following formula:

 SWEt = qft - min (SWPMt ,SWPDt) 
  

	10.	For the purposes of paragraphs 2 and 3: 

  

	 	qgt	means the adjustment to allowed demand revenue in respect of the standard of performance for supply restoration imposed on the licensee under regulation 5 and shall
be the amount derived from the following formula: 

 qgt = min[(NCPMt –
NCPDt),0] 
 where: 
  

			
	NCPDt	  	is the total amount of the payments in relevant year t which either have been paid to customers or, where not paid, which customers would have been entitled to claim for the licensee’s
failure to meet the standard of performance for supply restoration imposed on the licensee under regulation 5.
		
	NCPMt	  	is the total amount of the payments that the licensee has made formally to customers in relevant year t in respect of failure to meet the standard of performance for supply restoration
imposed on the licensee under regulation 5 or that has been paid to customers in the form of ex gratia payments in respect of such failure.

  

	11.	Where the report of an examiner specifies that the level of accuracy of any specified information used for the purpose of any formula in this condition is less than the level of
accuracy specified for such information in the quality of service rigs, the Authority may, after consulting the licensee and having regard to all relevant information and circumstances, and so as to mitigate any distortion arising from that
inaccuracy, by notice to the licensee direct which data shall be used in substitution for that information for the purposes of that formula. 

  

	12.	Where: 

  

	 	(a)	the licensee considers that its performance in respect of any matter used for calculating CIISt or CMLISt has been affected by a severe weather event that meets
the relevant exceptionality requirement defined in Annex B; 

  

	 	(b)	the licensee has notified the Authority of such event within 14 days of the date upon which the licensee considers that such effect has ceased or within 14 days of the end of the
relevant year (whichever is the earlier); 

  

	 	(c)	the examiner or the Authority has verified the impact of the event on performance; and 

  

	 	(d)	the Authority is satisfied that the severe weather event meets the relevant exceptionality requirement defined in Annex B, 

 the licensee’s performance used for calculating CIISt or CMLISt shall be adjusted so as to exclude the full verified
impact of the event as directed by the Authority. 
  

	13.	Where: 

  

	 	(a)	the licensee considers that its performance in respect of any matter used for calculating CIISt or CMLISt has been affected by an event which does not meet the
exceptionality requirement defined in Annex B but does meet the exceptionality requirements defined in Annex C; 

  

 275 

	 	(b)	the licensee has notified the Authority of such event within 14 days of the date upon which the licensee considers that such effect has ceased or within 14 days of the end of the
relevant year (whichever is the earlier); 

  

	 	(c)	the examiner has reported to the Authority in respect of such event and its effect; 

  

	 	(d)	the licensee has provided such further information, if any, as the Authority may require; and 

  

	 	(e)	the Authority is satisfied that the event meets the exceptionality requirements defined in Annex C, 

 the Authority may, having regard to whether the licensee has met the criteria for mitigating actions set out in Annex D, by notice to the licensee direct
that, for the purpose of calculating CIISt or CMLISt , or both, all or part of the impact of the event which is in excess of the relevant threshold in successive three-month periods from the start of the event
until its effect has ceased shall be excluded from the relevant year’s performance of the licensee. 
  

	14.	A direction under paragraph 11, 12 or 13 shall not have effect unless, before it is made, the Authority has given notice to the licensee: 

  

	 	(a)	setting out the terms of the proposed direction; 

  

	 	(b)	stating the reasons why it proposes to issue the direction; and 

  

	 	(c)	specifying the period (not being less than 14 days from the date of the notice) within which the licensee may make representations or objections, 

 and has considered any such representations or objections and given reasons for its decision. 
  

	15.	A notice under paragraph 11 of standard condition 49 (Quality of Service Incentive Scheme and Associated Information) in relation to Appendix 2 of the quality of service rigs may
not specify a date for the purposes of paragraph 11(a) of that condition which is other than a price control review date unless all distribution services providers have agreed that date. 

  

	16.	In this condition:  

  

	 	(a)	any reference to a numbered regulation is a reference to the regulation bearing that number in the Electricity (Standards of Performance) Regulations 2005. 

 

	 	(b)	where the terms “max” and “min” are used in any formula, for any two given amounts X and Y, “min (X,Y)” means X if X-Y is negative (and otherwise means
Y), and “max (X,Y)” means Y if X-Y is negative (and otherwise means X). 

  

	 	(c)	words and expressions defined for any purposes of: 

  

	 	(i)	special condition B1 (Restriction of distribution charges: demand use of system charges); and 

  

	 	(ii)	standard condition 49 (Quality of Service Incentive Scheme and Associated Information), 

 shall have the same meaning when used in this condition. 
  

 276 

	 	(d)	words and expressions defined in the quality of service rigs which are used in this condition shall have the same meaning as in that document. 

 Annex A: Targets and incentive rates for interruptions: SP Manweb plc 
  

											
	 Relevant year commencing:
	  	1 April
2005	  	1 April
2006	  	1 April
2007	  	 1 April
 2008
	  	1 April
2009
	 TAt
	  	46.7	  	46.7	  	46.7	  	46.7	  	46.7
	 IRAt (£ million 2002/03 prices)
	  	0.18	  	0.18	  	0.18	  	0.18	  	0.18
	 TBt
	  	51.8	  	49.9	  	48.0	  	46.1	  	44.2
	 IRBt (£ million 2002/03 prices)
	  	0.20	  	0.21	  	0.22	  	0.23	  	0.24

  

 277 

 Annex B: Exceptionality requirement for severe weather events 
 The relevant requirement for a severe weather event to be treated as exceptional for the purposes of paragraph 12 is that the number of incidents caused by the event at
distribution higher voltage in any 24-hour period is equal to or greater than the severe weather exceptionality threshold: 
 where, for the purposes of this
condition: 
  

	(a)	the severe weather exceptionality threshold is equal to the number of incidents set against the name of the licensee in the table below; 

  

	(b)	“distribution higher voltage” means nominal voltages of more than 1000 volts up to and including 132 kilovolts; and 

  

	(c)	“incidents” are as defined in the quality of service rigs. 

  

			
	 Licensee
	  	Severe weather
exceptionality
threshold
	 Central Networks West plc
	  	63
	 Central Networks East plc
	  	58
	 United Utilities Electricity plc
	  	47
	 Northern Electric Distribution Limited
	  	36
	 Yorkshire Electricity Distribution plc
	  	35
	 Western Power Distribution (South West) plc
	  	54
	 Western Power Distribution (South Wales) plc
	  	46
	 EDF Energy Networks (LPN) plc
	  	10
	 EDF Energy Networks (SPN) plc
	  	46
	 EDF Energy Networks (EPN) plc
	  	72
	 SP Distribution Limited
	  	79
	 SP Manweb plc
	  	61
	 Scottish Hydro-Electric Power Distribution Limited
	  	61
	 Southern Electric Power Distribution plc
	  	62

  

 278 

 Annex C: Exceptionality requirements for other events 
 For the purposes of paragraph 13, the exceptionality requirements for an event not falling within paragraph 12 are: 
  

	(a)	that the occurrence of the event (including, without limitation, an event arising from an incident on a transmission network or other connected network, or from terrorism or
vandalism) is outside the control of the licensee and is a consequence of an external cause; and 

  

	(b)	that the event contributes more than the relevant threshold amount to CIISt or CMLISt in a three-month period, 

 where, in paragraph (b), the relevant threshold amounts for CIISt and CMLISt respectively are those set against the name of the
licensee in the table below. 
  

					
	 Licensee
	  	CI threshold
amount	  	CML
threshold
amount
	 Central Networks West plc
	  	1.1	  	0.9
	 Central Networks East plc
	  	1.0	  	0.8
	 United Utilities Electricity plc
	  	1.1	  	0.9
	 Northern Electric Distribution Limited
	  	1.6	  	1.3
	 Yorkshire Electricity Distribution plc
	  	1.2	  	0.9
	 Western Power Distribution (South West) plc
	  	1.7	  	1.4
	 Western Power Distribution (South Wales) plc
	  	2.3	  	1.9
	 EDF Energy Networks (LPN) plc
	  	1.1	  	0.9
	 EDF Energy Networks (SPN) plc
	  	1.2	  	0.9
	 EDF Energy Networks (EPN) plc
	  	0.7	  	0.6
	 SP Distribution Limited
	  	1.3	  	1.0
	 SP Manweb plc
	  	1.7	  	1.4
	 Scottish Hydro-Electric Power Distribution Limited
	  	3.7	  	2.9
	 Southern Electric Power Distribution plc
	  	0.9	  	0.7

  

 279 

 Annex D: Criteria for mitigating actions 
 For the purposes of paragraph 13, the criteria for mitigating actions are: 
  

	 	(a)	that the licensee’s actions (or lack of actions) were not contributory factors to the occurrence of the event; and 

  

	 	(b)	that the licensee took all appropriate steps within its power: 

  

	 	(i)	to limit the number of customers interrupted by the event, and 

  

	 	(ii)	to restore customers’ supplies quickly and efficiently, having due regard to safety and other legal obligations. 

 Annex E: Values for Q by licensee 
 For the purpose of
calculating IQt for the relevant year commencing 1 April 2005, the values of Qt-2 and Qt-3 for each licensee are as set out in the table below. 
  

										
	 Licensee
	  	 Qt-3
	  	 Qt-2

	 Central Networks West plc
	  	-£	  	 	42,523	  	£	  	54,025
	 Central Networks East plc
	  	£	  	 	78,531	  	-£	  	249,159
	 United Utilities Electricity plc
	  	-£	  	 	530,583	  	£	  	34,910
	 Northern Electric Distribution Limited
	  	£	  	 	128,076	  	£	  	138,097
	 Yorkshire Electricity Distribution plc
	  	£	  	 	102,352	  	£	  	96,044
	 Western Power Distribution (South West) plc
	  	£	  	 	113,704	  	£	  	142,162
	 Western Power Distribution (South Wales) plc
	  	£	  	 	48,633	  	£	  	91,263
	 EDF Energy Networks (LPN) plc
	  	-£	  	 	225,240	  	-£	  	282,750
	 EDF Energy Networks (SPN) plc
	  	-£	  	 	16,002	  	-£	  	55,071
	 EDF Energy Networks (EPN) plc
	  	-£	  	 	148,927	  	-£	  	221,721
	 SP Distribution Limited
	  	£	  	 	49,620	  	£	  	72,480
	 SP Manweb plc
	  	£	  	 	29,875	  	-£	  	381,372
	 Scottish Hydro-Electric Power Distribution Limited
	  	£	  	 	157,222	  	£	  	197,028
	 Southern Electric Power Distribution plc
	  	£	  	 	171,883	  	£	  	202,806

  

 280 

 SPECIAL CONDITION C3 – Calculation of charge restriction adjustments arising from the innovation funding
incentive scheme 
  

	1.	The purpose of this condition is to provide for adjustments to allowed demand revenue to reflect the performance of the licensee in relation to its investment in innovation under
the innovation funding incentive (IFI) scheme established pursuant to standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding and Registered Power Zones). 

  

	2.	For the purposes of paragraph 2 of special condition B3 (Restriction of distribution charges: total incentive revenue adjustment), IFIt is derived for the relevant year t from the formula: 

 IFIt = ptrit x (min(IFIEt , ((0.005 x CBRt) + KIFIt))) 
 where: 
  

	 	IFIEt	means the eligible IFI expenditure for the relevant year t as reported in the IFI annual report for that year (provided that
any such expenditure incurred between 1 October 2004 and 31 March 2005 inclusive shall be treated as if incurred in the relevant year commencing 1 April 2005). 

  

	 	CBRt	means combined distribution network revenue in the relevant year t as defined in special condition A1 (Definitions and
interpretation). 

  

	 	ptrit	is the pass-through factor applicable for the relevant year t as specified below: 

  

											
	 Relevant year t
	  	2005/06	  	2006/07	  	2007/08	  	2008/09	  	2009/10
	 ptrit
	  	0.9	  	0.85	  	0.8	  	0.75	  	0.7

  

	 	KIFIt	is the IFI carry-forward in relation to the incentive
scheme as set out in the IFI annual report for relevant year t-1, and is calculated from the following formula: 

 

 
 where, for the year commencing 1 April 2005, KIFIt shall be zero. 
  

	3.	For the purposes of the incentive scheme, the eligible IFI internal expenditure that qualifies as eligible IFI expenditure in the relevant year t (IFIIEt) shall not exceed the amount determined by the following formula: 

 IFIIEt £ z x IFIEt 
 where: 
  

	 	IFIIEt	is the eligible IFI internal expenditure that qualifies as eligible IFI expenditure for the
relevant year t. 

	 	z	shall take the value, except insofar as the Authority consents otherwise, of 0.15. 

  

 281 

	4.	For the purposes of this condition: 

  

			
	“eligible IFI internal expenditure”	  	means that amount of eligible IFI expenditure spent or accrued on the internal resources of the licensee;
		
	“eligible IFI expenditure”	  	means the amount of expenditure spent or accrued by the licensee in respect of eligible IFI projects;
		
	“eligible IFI projects”	  	means those projects that meet the requirements described for such projects; and
		
	“IFI annual report”	  	means the report produced each year by the licensee, in a format agreed with the Authority, in respect of expenditure on innovation,

 in each case above, all as more fully set out in the regulatory instructions and guidance for the
time being in force under standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding, and Registered Power Zones) in relation to the incentive schemes established under that condition.

  

 282 

 SPECIAL CONDITION D1 – Restriction of distribution charges: generation use of system charges 
  

	1.	The purposes of this condition are to establish the charge restrictions that determine the level of allowed network generation revenue that may be recovered from generation use of
system charges by the licensee and to set out the obligation of the licensee in respect of those restrictions. 

 Formula
for allowed network generation revenue (AGt) 
  

	2.	The licensee, in setting its generation use of system charges, shall take all appropriate steps within its power to ensure that, in the relevant year t, network generation revenue
does not exceed allowed network generation revenue calculated in accordance with the following formula: 

 AGt = IGt + RPZt – KGt 
 where: 
  

	 	AGt	means allowed network generation revenue in the relevant year t. 

  

	 	IGt	is the incentive revenue for distributed generation, and in the relevant year t is derived
from the formula in paragraph 2 of special condition D2 (Calculation of charge restriction adjustments arising from the incentive schemes for distributed generation and registered power zones). 

  

	 	RPZt	is the incentive revenue for registered power zones, and in the relevant year t is derived
from the formula in paragraph 9 of special condition D2 (Calculation of charge restriction adjustments arising from the incentive schemes for distributed generation and registered power zones). 

  

	 	KGt	means the correction factor in relevant year t, whether of a positive or negative value,
calculated in accordance with the formula given in paragraph 3. 

 Formula for the correction factor (KGt) 
  

	3.	For the purpose of paragraph 2, KGt is derived
from the following formula: 

 

 
 where: 
  

	 	RGt-1	means the network generation revenue in the year preceding the relevant year t, except in the
relevant year commencing 1 April 2005 where RGt-1 shall take the value of zero. 

  

	 	AGt-1	means allowed network generation revenue in the year preceding the relevant year t, except in
the relevant year commencing 1 April 2005 where AGt-1 shall take the value of zero. 

 

	 	It	means the average specified rate (as defined under those words in special condition A1
(Definitions and interpretation)) in the relevant year t. 

  

	 	PRt	means the rate of interest that is applicable in accordance with paragraph 2 of special
condition E1 (Charge restriction conditions: supplementary restrictions). 

  

 283 

 SPECIAL CONDITION D2 – Calculation of charge restriction adjustments arising from the incentive schemes for
distributed generation and registered power zones 
  

	1.	The purposes of this condition are to provide for adjustments to allowed network generation revenue so as to reflect the performance of the licensee in relation to the incentive
schemes for distributed generation and registered power zones established pursuant to standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding and Registered Power Zones).

  

	2.	For the purposes of paragraph 2 of special condition D1 (Restriction of distribution charges: generation use of system charges), IGt is the amount derived from the following formula: 

 IGt = GIt + GPt + GOt 
  

	3.	For the purposes of paragraph 2, GIt means the
total incentive payment in the relevant year t, as derived from the following formula: 

 GIt = PIAGt x gir x
gct 
 where: 
  

	 	PIAGt	is the price index adjuster relating to DG, and is as set
out in paragraph 6. 

  

	 	gir	is the incentive rate for the scheme, which takes the value of £1500 per MW of incentivised DG capacity, except in relation to Scottish Hydro-Electric Power
Distribution Limited where it shall take the value of £2000 per MW. 

  

	 	gct	is the total incentivised capacity of relevant DG that is
directly or indirectly connected to the licensee’s distribution system as at 31 March of the relevant year t, expressed in MW. 

  

	4.	For the purposes of paragraph 2, GPt means an amount representing the pass-through revenue in respect of the connection of distributed generation in the relevant year t, and is calculated in accordance with the following formula:

 

 
 where: 
  

	 	PIAGt	is the price index adjuster relating to DG, and is as set
out in paragraph 6. 

  

	 	r	is the allowed pre-tax cost of capital, expressed in real terms, which, for the purposes of this condition, shall take the value of 6.9%. 

  

	 	y	is the value of t for the relevant year commencing 1 April 2005. 

  

	 	P	means the number of complete relevant years over which use of system capex is remunerated, which for the purposes of this condition takes the value of 15. 

 

 284 

	 	gpj	means the amount of total use of system capex that is
subject to the pass-through arrangement of the incentive scheme in the relevant year j and is derived from the following formula: 

 gpj = ptrgx(gpsj + gpcj) –
gpcj 
 where: 
  

	 	ptrg	is the pass-through rate and shall take the value of 0.8. 

  

	 	gpsj	is the amount, expressed in pounds sterling, of use of
system capex for DG for relevant year j. 

  

	 	gpcj	is the amount, expressed in pounds sterling, of shared
connection capex for DG for relevant year j. 

  

	 	gtj	is the amount of capex that is excluded from this
calculation to reflect the transfer of capex from the DG incentive scheme in accordance with paragraph 8. 

  

	5.	For the purposes of paragraph 2, GOt is the adjustment to allowed network generation revenue in respect of the operational and maintenance costs of total capex for DG for relevant year t, and is derived from the following formula:

 GOt = PIAGt x gor x gct 
 where: 
  

	 	PIAGt	is the price index adjuster relating to DG, and is as set
out in paragraph 6. 

  

	 	gct	is as defined in paragraph 3.

  

	 	gor	is the allowed operational and maintenance rate for all relevant DG, and has a value of £1000 per MW of incentivised DG capacity. 

  

	6.	For the purposes of this condition, PIACt
is the price index adjuster in relevant year t as derived from the following formula: 

 

 
 Where: 
 for the relevant year commencing 1 April 2005, PIAGt = 1. 
 RPIt is as defined as in paragraph 4 of special condition B1 (Restriction of distribution charges: demand use of system charges). 
  

	7.	For the purposes of this condition, the incentive rate for the scheme, gir, shall take the value set out in paragraph 3 for each and every relevant year up to and including
the relevant year commencing 1 April 2024 insofar as it is applied to incentivised DG capacity relevant to the licensee’s distribution system during the period from 1 April 2005 to 31 March 2010. 

  

 285 

	8.	For the purpose of determining gtj in paragraph
4, the licensee, with the consent of the Authority, may exclude capex in respect of those assets for which capex has been initially treated as use of system capex for DG but in respect of which: 

  

	 	(a)	the incentivised DG capacity utilising those assets has fallen because the owner or operator of a relevant DG, or any agent thereof, has terminated its agreements for generator use
of system (or such parts of any other use of system agreements as may apply) and connection to an authorised distributor’s distribution system, or has otherwise reduced the capacity required; and 

  

	 	(b)	those assets have a value that has not been fully depreciated through generation use of system charges for 15 complete relevant years in accordance with paragraph 4.

  

	9.	For the purposes of paragraph 2 of special condition D1 (Restriction of distribution charges: generation use of system charges), RPZt (the incentive revenue for registered power zones in the relevant year t) is derived from the formula: 

 RPZt =
PIAGt x min(RPZM , giz x gczt) 
 where: 
  

	 	PIAGt	is the price index adjuster relating to DG, and is as set
out in paragraph 6. 

  

	 	RPZM	means the annual cap on RPZ revenue and takes the value of £500,000. 

  

	 	giz	means the incremental incentive rate for connecting a relevant DG within that area registered by the Authority as a registered power zone, and shall take a value of
£3000 per MW of RPZ DG capacity. 

  

	 	gczt	is the amount of RPZ DG capacity, expressed in MW,
connected to the licensee’s distribution system in the relevant year t, as at 31 March of that year, within that area registered by the Authority as a registered power zone for the purposes of this condition.

  

	10.	For the purposes of this condition: 

  

			
	“capex”	  	means costs directly incurred by the licensee in relation to the installation or reinforcement of electrical lines or electrical plant forming part of the licensee’s distribution
system.
		
	“incentivised DG capacity”	  	 in relation to any relevant year, means the highest active electrical power that could be generated (or the relevant incremental change in this
amount in cases involving the expansion of existing distributed generation) by a relevant DG for that year, according to:
  
 (a)      the connection and use of system agreements in force on 31 March of that relevant year in
relation to the relevant plant or apparatus; or
  
 (b)      in any case of generation covered by Engineering Recommendation G83/1 (or any authorised successor thereof), the notification received by the licensee on or before 31 March of that year,
  
 in each case as connected at 31 March of the relevant year;

  

 286 

			
	“relevant DG”	  	means distributed generation (except for distributed generation operating in parallel with the licensee’s distribution system for the purposes of standby) which has a connection start
date on or after 1 April 2005 and is eligible for use of system charges (if any) in accordance with the licensee’s use of system charging methodology in place on or after 1 April 2005;
		
	“RPZ DG capacity”	  	means the sum of incentivised DG capacity of all relevant DG with a connection point to that part of the licensee’s distribution system that forms a registered power zone;
		
	“shared connection capex for DG”	  	means that part of the total capex for DG that is to be recovered from generation connection charges payable to the licensee, but exclusive of all costs relating to sole-use assets and, where
appropriate, exclusive also of the incremental costs in excess of the high-cost project threshold (as set out in the licensee’s connection charging methodology statement in place on or after 1 April 2005);
		
	“total capex for DG”	  	means the sum of all costs directly incurred by the licensee in relation to the installation or reinforcement of electrical lines or electrical plant necessary for the connection of relevant DG
or any proposed or expected relevant DG for subsequent relevant years and, for the avoidance of doubt, includes the increase in the present value of costs resulting from the advancement in time, to within the relevant year, of the reinforcement of
assets so as to facilitate the connection of the relevant DG;
		
	“total incentivised DG capacity”	  	means the sum, for all relevant DG for the licensee’s distribution system, of the incentivised DG capacity; and
		
	“use of system capex for DG”	  	means that amount of total capex for DG that is not remunerated through connection charges payable to the licensee,

 in each case above, all as more fully set out in the regulatory instructions and guidance for the time being in
force under standard condition 51 (Incentive Schemes and Associated Information for Distributed Generation, Innovation Funding and Registered Power Zones) in relation to the incentive schemes established under that condition. 
  

 287 

 SPECIAL CONDITION E1 – Charge restriction conditions: supplementary restrictions 
  

	1.	The purpose of this condition is to set out the supplementary restrictions on distribution charges levied by the licensee. 

 Restrictions on over- and under-recoveries 
  

	2.	For the purposes of paragraph 5 of special condition B1 (Restriction of distribution charges: demand use of system charges) and paragraph 3 of special condition D1 (Restriction of
distribution charges: generation use of system charges), the interest rate adjustment PRt shall be determined as
follows: 

  

	 	(a)	if, in respect of the relevant year t-1, the combined distribution network revenue exceeds the combined allowed distribution network revenue by more than 2 per cent,
PRt shall take the value of 3; or 

  

	 	(b)	if, in respect of the relevant year t-1, the combined distribution network revenue is less than the combined allowed distribution network revenue by more than 2 per cent,
PRt shall take the value of zero; 

 and otherwise: 
  

	 	(c)	PRt shall take the value of 1.5.

 Restrictions on demand charges 
  

	3.	If, in respect of any relevant year, regulated demand revenue exceeds allowed demand revenue by more than 4 per cent, the licensee shall provide an explanation to the Authority
and in the next following relevant year shall not, unless and insofar as the Authority consents, increase demand use of system charges. 

  

	4.	If, in respect of each of two successive relevant years, regulated demand revenue is less than 90 per cent of allowed demand revenue, the Authority, after consultation with the
licensee, may direct that, in calculating KDt for the purposes of paragraph 5 of special condition B1 (Restriction
of distribution charges: demand use of system charges) in respect of the next following relevant year, there shall be substituted for the amount represented by RDt-1 in the formula at that paragraph such amount as the Authority may specify, being an amount not less than RDt-1 and not more than 0.9x(ADt-1). 

 Restrictions on generation charges 
  

	5.	If, in respect of any relevant year, network generation revenue exceeds allowed network generation revenue by more than 10 per cent, the licensee shall provide an explanation
to the Authority and in the next following relevant year shall not, unless and insofar as the Authority consents, increase generation use of system charges. 

  

	6.	If, in respect of each of two successive relevant years, network generation revenue is less than 75 per cent of allowed network generation revenue, the licensee shall provide
an explanation to the Authority and in the next following relevant year shall not, unless the Authority consents, increase generation use of system charges by more than 20 per cent. 

  

 288 

 Distribution unit categories 
  

	7.	Not less than three months after the start of the relevant year commencing 1 April 2005, the licensee shall give the Authority a statement specifying separately those use of
system charges in respect of which the licensee intends to treat the units distributed as falling within the definition of each of LV1 units and LV2 units and LV3 units respectively. 

  

	8.	If the licensee introduces a category of use of system charges not identified in the statement provided to the Authority in accordance with paragraph 7, the licensee shall provide a
statement to the Authority specifying the distribution unit categories that units distributed, in respect of those use of system charges introduced by the licensee, are to be treated as falling within. 

  

	9.	Where the Authority is satisfied that a use of system charge or charges in respect of which the licensee has treated the units as falling within one of the distribution unit
categories i should not be so treated, the Authority shall after consultation with the licensee issue a direction specifying the category into which the units should fall and shall specify the date from which they should be so treated, being
a date not earlier than 1 April 2005. 

  

 289 

 SPECIAL CONDITION F1 – Restriction of basic metering charges 
  

	1.	The purposes of this condition are to establish the restrictions on charges for basic meter asset provision and basic meter operation services provided by the licensee and to set
out the obligations of the licensee in respect of those restrictions. 

 Part A: Basic meter asset provision 
  

	2.	The licensee shall, in setting charges for basic meter asset provision in accordance with standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering
Services), ensure that those charges do not exceed the limits imposed by paragraphs 3 to 7. 

 Restraints on charges for
single-phase single-rate credit meters 
  

	3.	The licensee shall, in setting charges for the provision of a single-phase single-rate credit meter, ensure that the total charge is at no time greater than the value derived from
the following formula: 

 SRCMt = £1.12 x PIT 
 where: 
  

			
	 SRCMt
	  	is the maximum amount that the licensee may charge for the provision of a single-phase single-rate credit meter in the relevant year t.
		
	 PITt
	  	shall be the value determined in accordance with paragraph 11.

 Restraints on charges for single-rate token prepayment meters 
  

	4.	The licensee shall, in setting charges for the provision of a single-rate token pre-payment meter, ensure that the total charge is at no time greater than the value derived from the
following formula: 

 

 
 where: 
 TPPMt is the maximum amount that the licensee may charge for the provision of a single-rate token
prepayment meter in the relevant year t. 
 TPPMAV means the modern equivalent asset value of a single-rate token pre-payment meter and shall
take the value of £59.00. 
  

			
	 LTt
	  	is the current expected life of a single-rate token prepayment meter, as calculated using the following formula:

 LTt = 9.72 – LRTPPMt 
 where: 
  

	 	LRTPPMt	means the allowed reduction in the expected asset life of a single-rate token prepayment
meter since 1 April 2005 as determined in accordance with paragraph 17 to 21. 

  

 290 

  

	 	LTWt	shall take the value of LTt rounded down to the nearest integer. 

  

	 	PITt	shall be the value determined in accordance with paragraph 11. 

 Restraints on charges for single-rate key prepayment meters 
  

	5.	The licensee shall, in setting charges for the provision of a single-rate key prepayment meter, ensure that the total charge is at no time greater than the value derived from the
following formula: 

 

 
 where: 
  

	 	KPPMt	is the maximum amount that the licensee may charge for the provision of a single-rate key
prepayment meter in the relevant year t. 

  

	 	KPPMAV	means the modern equivalent asset value of a single-rate key prepayment meter and shall take the value of £60.31. 

  

	 	LKt	is the current expected life of a single-rate key prepayment meter, as calculated in
accordance with the following formula: 

 LKt = 9.34 – LRKPPMt 
 where: 
  

	 	LRKPPMt	means the allowed reduction in the expected asset life of a single-rate key prepayment meter
since 1 April 2005 as determined in accordance with paragraphs 17 to 21. 

  

	 	LKWt	shall take the value of LKt rounded down to the nearest integer. 

  

	 	PITt	shall be the value determined in accordance with paragraph 11. 

  

 291 

 Restraints on charges for single-rate smartcard prepayment meters 
  

	6.	The licensee shall, in setting charges for the provision of a single-rate smartcard prepayment meter, ensure that the total charge is at no time greater than the value derived from
the following formula: 

 

 
 where: 
  

	 	SPPMt	is the maximum amount that the licensee may charge for the provision of a single-rate
smartcard prepayment meter in the relevant year t. 

  

	 	SPPMAV	means the modern equivalent asset value of a single-rate smartcard prepayment meter and shall take the value of £62.77. 

  

	 	LSt	is the current expected life of a single-rate smartcard prepayment meter, as calculated in
accordance with the following formula: 

 LSt = 7.00 – LRSPPM, 
 where: 
  

	 	LRSPPMt	means the allowed reduction in the expected asset life of a single-rate smartcard prepayment
meter since 1 April 2005 as determined in accordance with paragraph 17 to 21. 

  

	 	LSWt	shall take the value of LSt rounded down to the nearest integer. 

  

	 	PITt	shall be the value determined in accordance with paragraph 11. 

 Restraints on charges for all other types of meter provided under standard condition 36 (Requirement to Offer Terms for the Provision of Basic
Metering Services) 
  

	7.	The licensee shall, in setting charges for the provision of types of meter under standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services)
other than those covered by paragraphs 3 to 6, ensure that the total charge for such provision is at no time greater than the value derived from the following formula: 

 

 
 where: 
  

	 	MAPPC	is the maximum amount that the licensee may charge for the provision of types of meter other than those covered by paragraphs 3 to 6 in the relevant year t.

  

 292 

	 	MEAPi	is the modern equivalent asset purchase price of the meter type i as at 1 June
2003 or the nearest determinable date after 1 June 2003. 

  

	 	ELAi	is the current expected economic life of the meter type i. 

 

	 	PITt	shall take the value determined in accordance with paragraph 11. 

  

	8.	The following types of meter shall (without limitation and subject to the right of the licensee to sub-divide any such type in order to facilitate cost-reflective charging)
constitute those which are covered by the provisions of paragraph 7: 

  

	 	(a)	multi-rate single-phase credit meters; 

  

	 	(b)	multi-rate single-phase prepayment meters; 

  

	 	(c)	poly-phase single-rate whole current meters; 

  

	 	(d)	poly-phase multi-rate whole current meters; and 

  

	 	(e)	non-half hourly current transformer meters. 

 Part B: Basic meter
operation services 
  

	9.	The licensee shall, in setting its charges for the services of basic meter operation provided in accordance with standard condition 36 (Requirement to Offer Terms for the Provision
of Basic Metering Services), take all appropriate steps within its power to ensure that basic meter operation revenue in the relevant year t does not exceed the amount represented by the term MOPt (being allowed meter operation revenue) calculated in accordance with the following formula: 

 MOPt = MOPRt – RMAt 
 where: 
  

	 	MOPRt	is the baseline meter operation revenue derived from the following formula: 

 MOPRt = MRV x PITt 
 where: 
  

	 	MRV	is the baseline meter operation allowance in 2002/03 prices and shall take the value of that term set against the licensee’s name in Annex A. 

  

	 	PITt	shall take the value determined in accordance with paragraph 11. 

  

	 	RMAt	is the adjustment to the revenue associated with basic meter operation and is derived from
the formula given in paragraph 10. 

  

	10.	For the purposes of paragraph 9, RMAt is derived
from the following formula: 

 RMAt = SCAt + PCAt + CTCAt 
 where: 
  

 293 

	 	SCAt	is the revenue adjustment for changes in the level of single-phase metering chargeable
activities and is calculated using the following formula: 

 SCAt = (FSCA – SPCAt)x(21.37xPITt) 
 where: 
  

	 	FSCA	is the starting value for the single-phase metering chargeable activities and shall take the value of that term set against the licensee’s name in Annex A.

  

	 	SPCAt	is the number of single-phase metering chargeable activities undertaken in the relevant year
t. 

  

	 	PITt	shall be the value determined in accordance with paragraph 11. 

  

	 	PCAt	is the revenue adjustment for changes in the level of poly-phase metering chargeable
activities and is calculated in accordance with the following formula: 

 PCAt = (FPCA – PPCAt)x(34.91xPITt) 
 where: 
  

	 	FPCA	is the starting value for the poly-phase metering chargeable activities and shall take the value of that term set against the licensee’s name in Annex A.

  

	 	PPCAt	is the number of poly-phase metering chargeable activities undertaken in the relevant year t.

  

	 	PITt	shall take the value determined in accordance with paragraph 11. 

  

	 	CTCAt	is the revenue adjustment for changes in the level of current transformer metering chargeable
activities and is calculated using the following formula: 

 CTCAt = (FCTA – CCAt)x(106.67xPITt) 
 where: 
  

	 	FCTA	is the starting value for the current transformer metering chargeable activities and shall take the value of that term set against the licensee’s name in Annex A.

  

	 	CCAt	is the number of current transformer metering chargeable activities undertaken in the relevant year t. 

  

	 	PITt	shall take the value determined in accordance with paragraph 11. 

  

	11.	For the purposes of paragraphs 3 to 10, the price index adjustment (PIT) shall be calculated as follows: 

 

 
  

 294 

 where: 
  

	 	PITt	in the relevant year commencing 1 April 2002 shall take the value of 1.

  

	 	RPIt	is determined in accordance with paragraph 4 of special condition B1 (Restriction of
distribution charges: demand use of system charges). 

 Part C: Relief from onerous obligations 
  

	12.	This paragraph applies where the licensee considers: 

 (a)
that the selective appointment by a supplier (“the relevant supplier”) of a provider or providers other than the licensee of basic meter operation services has materially altered, or is likely so to alter, the average cost to the licensee
of meeting its obligations pursuant to standard condition 36 (Requirement to Offer Terms for the Provision of Basic Metering Services) in respect of the provision of basic meter operation services; 
 (b) that as a consequence it is necessary for the licensee to depart from its published statement of charges prepared in accordance with paragraph 1 of
standard condition 36C (Basis of Charges for Basic Metering Services and Data Services: Requirements for Transparency) by increasing the charges to be levied on the relevant supplier for the continuing provision of basic meter operation
services; and 
 (c) that the increase in those charges required by the licensee would, in the absence of a derogation from the requirements
of paragraph 9 above in respect of allowed meter operation revenue, have the effect in any relevant year of putting the licensee in breach of this condition. 
  

	13.	Where paragraph 12 applies, the licensee may apply to the Authority for permission to increase the charges to be levied on the relevant supplier for the continuing provision of such
of the basic meter operation services as are the subject of the licensee’s request, stating why such changes are considered to be required, setting out the nature of the change in respect of each of the services in question, and providing such
other information to support its application as the Authority may require. 

  

	14.	The licensee may, with effect from the date of the application made in accordance with paragraph 13, levy the charges specified in that application in respect of the relevant
supplier if: 

  

	 	(a)	the Authority confirms that it consents to such charges with or without amendment and to such extent and on the basis of such terms and conditions as it may specify; or

  

	 	(b)	the Authority has not, within 90 days after its receipt of the application, issued a direction requiring the licensee not to exceed the allowed meter operation revenue calculated in
accordance with paragraph 9. 

 Part D: Excluded metering services 
  

	15.	For the avoidance of doubt, a premium on those charges for the following enhanced appointment services may fall to be chargeable under the provisions of special condition A2 (Scope
of the charge restriction conditions): 

  

	 	(a)	out of hours service appointments in time zone 2; 

  

	 	(b)	out of hours service appointments in time zone 3; 

  

 295 

	 	(c)	two-hour time-banded appointments; 

  

	 	(d)	same-day appointments; and 

  

	 	(e)	next-day appointments, 

 where time zone 2 covers any time
on a working day from the end of contractual working hours until 11pm from Monday to Saturday and time zone 3 covers: 
  

	 	(i)	any time on a working day from 11pm to the start of contractual working hours; and 

  

	 	(ii)	all day on Sunday or any other non-working day. 

  

	16.	Those charges for the provision of services in relation to which paragraph 15 applies shall be set at a level which will allow the licensee to recover no more than its reasonable
costs and a reasonable rate of return in providing those services. 

 Part E: Determination of the reduction in asset life 

 

	17.	For the purposes of paragraphs 4 to 6, where the licensee considers that the expected asset life of: 

  

	 	(a)	a single-rate token prepayment meter; 

  

	 	(b)	a single-rate key prepayment meter; or 

  

	 	(c)	a single-rate smartcard prepayment meter, 

 has, as the
result of supplier action, fallen below the level assumed for the purposes of establishing the relevant charge restriction, the licensee may, by notice to the Authority, propose a relevant reduction in the asset life for the purposes of this
condition. 
  

	18.	A relevant reduction under paragraph 17 is one which, in the opinion of the licensee, would, if made, have the effect of enabling the licensee to recover the efficient costs
incurred or likely to be incurred in relation to basic meter asset provision. 

  

	19.	A notice served by the licensee in accordance with paragraph 17 must:  

  

	 	(a)	specify the restriction to which the notice relates; 

  

	 	(b)	set out the basis (including by reference to the effects of supplier activity) on which the licensee has calculated the relevant reduction; and 

  

	 	(c)	state the date from which the licensee wishes the Authority to agree that the relevant reduction shall have effect (“the reduction date”). 

  

	20.	Where the licensee serves a notice under paragraph 17, the Authority: 

  

	 	(a)	following consultation with the licensee; and 

  

	 	(b)	having particular regard to the purposes of this condition, 

 may, within 28 days of receiving such notice, determine the relevant reduction in the expected asset life for the purposes of this condition in such manner as it considers appropriate. 
  

	21.	If the Authority has not determined the relevant reduction within 28 days of receiving a notice from the licensee under paragraph 17, and such a notice has not been withdrawn, the
licensee may apply the relevant reduction with effect from the reduction date for all relevant purposes of this condition. 

  

 296 

	22.	For the purposes of this condition: 

  

							
	“current transformer metering chargeable activities”	  	means, with the exception of single-phase metering chargeable activities and poly-phase
metering chargeable activities, those activities performed and charged for under
contract as at
1 June 2003 in relation to current transformer meter types.
		
	“modern equivalent asset purchase price”	  	in relation to any type of meter, means the purchase price of a new meter of the same
functionality as that type of meter.
		
	“poly-phase metering chargeable activities”	  	means, with the exception of single-phase metering activities and current transformer
metering chargeable activities, those activities performed and charged for under contract as
at
1 June 2003 in relation to poly-phase meter types.
		
	“single-phase metering chargeable activities”	  	means, with the exception of poly-phase metering chargeable activities and current
transformer metering chargeable activities:
			
		  	(a)	 	activities performed and charged for under contract as at 1 June 2003 in relation to single-
phase meter types; and
			
		  	(b)	 	the activities set out below:
				
		  		 	•	  	resealing a meter
				
		  		 	•	  	installing a timeswitch or teleswitch
				
		  		 	•	  	reprogramming a meter where it is not part of a bulk reprogramming operation
				
		  		 	•	  	de-energising or re-energising a meter
				
		  		 	•	  	making an abortive visit (not including a cancelled visit) to premises, and
				
		  		 	•	  	attending a visit by a DTI inspector
		
		  	in each case regardless of the type of meter on which the work is, or is to be, performed.
		
	“single-phase single-rate credit meter”	  	means an induction type (or electronic) alternating current single-phase two-wire single-rate
credit meter.
		
	“single-phase key prepayment meter”	  	means a meter which uses an essential element (the key) for transferring information from a
point of sale for electricity credit to a unique prepayment meter or vice
versa.
		
	“single-phase smartcard prepayment meter”	  	means a meter which uses an essential element (the smartcard) for transferring information
from a point of sale for electricity credit to a unique prepayment meter or vice
versa.
		
	“single-phase token prepayment meter”	  	means a meter which uses an essential element (the token) for transferring information from a
point of sale for electricity credit to a unique prepayment meter.

  

 297 

 Annex A: Values for MRV, FSCA, FPCA, and FCTA by licensee 
  

									
	 Licensee
	  	 MRV
 £million
	  	FSCA	  	FPCA	  	FCTA
	 Central Networks West plc
	  	8.39	  	251,266	  	9,813	  	921
	 Central Networks East plc
	  	8.74	  	275,625	  	14,095	  	967
	 United Utilities Electricity plc
	  	6.20	  	191,806	  	7,491	  	703
	 Northern Electric Distribution Limited
	  	7.52	  	273,618	  	3,418	  	1,111
	 Yorkshire Electricity Distribution plc
	  	7.42	  	253,623	  	9,905	  	930
	 Western Power Distribution (South West) plc
	  	6.06	  	211,362	  	6,883	  	674
	 Western Power Distribution (South Wales) plc
	  	4.19	  	143,197	  	5,593	  	525
	 EDF Energy Networks (LPN) plc
	  	7.95	  	221,137	  	10,165	  	3,891
	 EDF Energy Networks (SPN) plc
	  	8.73	  	270,969	  	11,972	  	4,404
	 EDF Energy Networks (EPN) plc
	  	10.78	  	377,151	  	13,390	  	1,009
	 SP Distribution Limited
	  	4.66	  	146,912	  	3,459	  	129
	 SP Manweb plc
	  	3.66	  	108,320	  	3,906	  	1,574
	 Scottish Hydro-Electric Power Distribution Limited
	  	2.69	  	88,294	  	3,448	  	324
	 Southern Electric Power Distribution plc
	  	9.09	  	310,974	  	12,145	  	1,140

  

 298 

 SPECIAL CONDITION G1 – Restriction of distribution charges outside the distribution services area 

 

	1.	The purpose of this condition is to establish the charge restrictions that apply to charges for demand use of system levied by the licensee in respect of its distribution business
outside the distribution services area. 

  

	2.	The licensee shall make available and continue to make available charges for the provision of use of system to any authorised supplier using the licensee’s network to supply
domestic customers. 

  

	3.	The licensee’s demand use of system charges in respect of the distribution of electricity to domestic customers may vary according to the distribution services area of the
licensed distributor within which domestic premises are connected to the licensee’s distribution system. 

  

	4.	The licensee shall set those charges so that, except with the prior written consent of the Authority, the standing charge, unit rate and any other component thereof shall not exceed
its demand use of system charges to equivalent domestic customers. 

  

	5.	For the purposes of this condition, the demand use of system charges to equivalent domestic customers are the charges for demand use of system levied by that licensed distributor
which is subject to a distribution services direction specifying the distribution services area in which the domestic premises connected to the licensee’s system are located. 

  

	6.	The Authority may specify, by direction, which of the charges for demand use of system levied by the licensed distributor with distribution services obligations for the distribution
services area are relevant for the purposes of determining the demand use of system charges to equivalent domestic customers. 

  

	7.	These charging arrangements shall have effect within this licence until such time and in such circumstances as are described in paragraphs 8 to 13. 

  

	8.	This condition 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 9, or notice is given to the Authority by the licensee in accordance with either paragraph 12 or paragraph 13. 

  

	9.	A disapplication request shall: 

  

	 	(a)	be in writing addressed to the Authority; 

  

	 	(b)	specify the paragraph or paragraphs of this condition to which the request relates; and 

  

	 	(c)	state the date (being not earlier than the date specified in paragraph 11) from which the licensee wishes the Authority to agree that the specified paragraph or paragraphs shall
cease to have effect (“the disapplication date”). 

  

	10.	The licensee may withdraw a disapplication request at any time. 

  

	11.	Save where the Authority consents otherwise, no disapplication following delivery of a disapplication request pursuant to paragraph 9 shall have effect until a date being the later
of: 

  

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

  

 299 

	(b)	31 March 2007. 

  

	12.	If the Authority has not made a reference to the Competition Commission under section 12 of the Act relating to the modification of this condition or the part or parts thereof
specified in the disapplication request before the beginning of the period of 12 months which will end with the disapplication date and the licensee has not withdrawn the disapplication request, the licensee may deliver a written notice to the
Authority terminating the application of this condition or the part or parts thereof specified in the disapplication request with effect from the disapplication date or such earlier date to which the Authority has given its consent under paragraph
11. 

  

	13.	If the Competition Commission’s report on a reference made by the Authority relating to the modification of this condition or the part or parts thereof specified in the
disapplication request does not include a conclusion that the cessation of such charge restrictions in this condition, 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 notice terminating the application of this condition or the part or parts thereof specified in the disapplication request with effect from
the disapplication date. 

  

 300 

 SCHEDULE 1 
 SPECIFIED AREA 
 Great Britain 
  

 301 

 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(g)) 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 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; 

  

 302 

	 	(d)	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. 

  

	 	(e)	if the licensee has not within 5 years after the date on which this licence comes into force, commenced the distribution of electricity to any of the premises within the area
specified in Schedule 1 to this licence; 

  

	 	(f)	if the licensee has ceased to distribute electricity to all of the premises within the area specified in Schedule 1 to this licence for a period of 5 years;

  

	 	(g)	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 

  

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

  

 303 

	2.	For the purposes of sub-paragraph l(g)(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 l(g)(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. 

  

 304 

 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 

 None 
  

	B:	EXCLUDED PREMISES 

  

	(a)	PART OF THE DISTRIBUTION SERVICES AREA OF NORWEB PLC 

  

			
	 Address
	  	Grid Ref:
	 Halsall Lane Pumping Station
	  	SD 4080 0864
	 Halsall Lane
	  	
	 Ormskirk
	  	
	 L39 3AT
	  	

  

 305 

 CONSENTS AND DIRECTIONS 
  

 306 

 Direction issued under Condition 27 of the Public Electricity Supply Licence of Manweb plc now Standard
Condition 29 of this licence (01.04.92) 
  

			
	OUR REF	 	BW-92-04.14
		 	[DIR/T/244]

 1 April 1992 
 Mr M G Metcalfe 
 Head of Regulation 
 Manweb plc 
 Sealand Road 
 CHESTER 
 CH1 4LR 
 PUBLIC ELECTRICITY SUPPLY
LICENCE: CONDITION 27 
 DISPOSAL OF RELEVANT ASSETS 
 The Director General of Electricity Supply (“the Director”) directs that for the purposes of Condition 27 of the Public Electricity Supply Licence (the “Licence”) issued to Manweb plc (the
“Licensee”) on 26 March 1990: 
  

	1.	The Licensee may dispose of a relevant asset without giving prior notice if: 

  

	 	(i)	the relevant asset is obsolete or redundant; 

  

	 	(ii)	the disposal will not constitute a disposal of a legal (rather than an equitable) interest until the relevant asset is obsolete or redundant; or 

  

	 	(iii)	where the relevant asset comprises only land above or below which an electric line (but not electrical plant) of the licensee is situated, the disposal complies with paragraph 3.

  

 307 

	2.	The consent in paragraph 1 shall not apply: 

  

	 	(i)	in respect of a relevant asset if 

  

	 	(a)	the value of that asset; 

  

	 	(b)	the value of that asset and other related relevant assets which are being or intended to be disposed of at the same time; or 

  

	 	(c)	the value of that asset and other relevant assets which together formed a part of the Licensee’s distribution system and are being declared obsolete or redundant at the same
time or as part of the same operation, 

 exceeds £100,000 (as amended on 1 April each year by the percentage change
in the Retail Price Index since 1 April 1990); 
  

	 	(ii)	in respect of a relevant asset which is obsolete unless an appropriate replacement or alterative arrangement has been installed in the Licensee’s distribution system, or is
being or is intended to be installed in such a manner that continuity of the function of that system is achieved; 

  

	 	(iii)	where the disposal constitutes a sale and lease back arrangement; 

  

	 	(iv)	where the relevant asset is intended to remain in operational use but not under the operational control of the Licensee and its value exceeds £10,000 (as amended on
1 April each year by the percentage change in the Retail Price Index since 1 April 1990); or 

  

	 	(v)	where the disposal would have the effect of reducing the ability of private electricity suppliers to compete with the Licensee by the use of its system. 

  

	3.	For the purposes of paragraph 1 (iii) the disposal shall be on terms which will permit the electric line (including any replacement thereof) to remain in position for as long
as it forms part o the licensee’s distribution system under a wayleave, easement or other legal estate which in any such case includes sufficient rights of access in favour of the Licensee for the purpose of inspection, maintenance, replacement
or repair as may reasonably be necessary to enable that line to remain in operation as part of the Licensee’s distribution system. 

  

 308 

	4.	The Licensee may without giving prior notice dispose of any relevant asset to a wholly owned subsidiary (“the subsidiary”) (as defined in the Companies Act 1985 as amended
or re-enacted from time to time) of the Licensee if the Licensee has prior to the disposal delivered to the Director a document duly executed by the subsidiary and the Licensee (in a form capable of being enforced by the Director) undertaking to the
Director that: 

  

	 	(i)	the subsidiary, in respect of the relevant asset, will comply with the provision of Conditions 27 and 28 of the Licence as if it were the Licensee; and 

  

	 	(ii)	the Licensee will not cause or permit the subsidiary to cease to be its wholly owned subsidiary without the prior written consent of the Director to the disposal of the relevant
asset(s) owned by the subsidiary. 

  

	5.	The Licensee may without giving prior notice grant to a third party an easement, wayleave, licence or similar right over any land or property in which the Licensee has a legal or
beneficial interest and which is a relevant asset, save where the grant of such a right would have a material adverse effect on the Licensee’s ability to use or develop the land for the purposes of the Licensee’s Distribution Business.

  

	6.	The Licensee may without giving prior notice dispose of any relevant asset to another Licensee provided that: 

  

	 	(i)	the Licensee to whom disposal is made is subject to the provisions of licence conditions equivalent to condition 27 and 28 of the Licence; 

  

	 	(ii)	the relevant asset will become a relevant asset under those equivalent licence conditions upon disposal; 

  

	 	(iii)	the Licensee will be able to fulfil the duties arising under or by virtue of the Licence after disposal of the relevant asset. 

  

	7.	The consent contained in paragraphs 1, 4, 5 and 6 relates only to Condition 27 and shall not apply or be deemed to apply for the purpose of any consent or approval which the
director may or may be required to give in relation to a disposal under any other Condition or under the Act. 

  

 309 

	8.	In this direction: 

 “obsolete” means no longer
performs its required function either in an efficient manner or at all through wear and tear, obsolescence, damage, failure, unsafe operation or advances in technology and includes equipment that the Licensee has decided to render obsolete as a
result of inspection; 
 “prior notice” means a notice to the Director under paragraph 2 of condition 27 of the Licence; 

“redundant” means no longer required or necessary in order to enable the Licensee to comply with its obligations under the Act or the Licence
in relation to the Licensee’s distribution system provided that a relevant asset shall not be regarded as being redundant solely because it is in the ownership or control of a third party; 
 “value” means the estimated price that could be expected to be received in the market at the time of disposal; 
 and other words and phrases in this Direction which are defined for the purposes of the Licence shall have the same meaning as in the Licence. 

DR B WHARMBY 
 Authorised on behalf of the 
 Director General of Electricity Supply 
  

 310 

 Direction issued under Condition 12 of the Public Electricity Supply Licence of Manweb plc now Standard
Condition 39 of this licence (19.04.00) 
 Direction given under Condition 12 of the public electricity supply licence of Manweb
plc 
 In accordance with paragraph 7 of Condition 12 of the public electricity supply licence held by Manweb plc (the Licensee), the Director hereby
directs as follows. 
 The Licensee shall, to the extent that it is not already compliant with its obligations as at 31st March 2000, be relieved of such obligations for the duration of this direction: 
  

	•	 	under paragraphs 2 to 4 of Condition 12; and 

  

	•	 	under paragraphs 5 and 6 of Condition 12 

 in each case subject to the terms and conditions set out below. 
 The Separation Plan 
  

	1.	The Licensee shall use all reasonable endeavours to comply with the terms of the Separation Plan. 

  

	2.	The Separation Plan shall be the document attached to this direction as Annex A, as it may be amended from time to time in accordance with paragraphs 7 and 8 below.

  

	3.	Where the Separation Plan specifies a date by which an action is to be completed, the Licensee shall use all reasonable endeavours to complete the action by that date.

  

 311 

	4.	Where the Separation Plan does not specify a date by which an action is to be completed, the Licensee shall use all reasonable endeavours to make progress towards the completion of
the action as soon as is reasonably practicable. 

  

	5.	The Licensee shall report to the Director on its compliance with the terms of the Separation Plan at least once every 3 months during the currency of this direction.

  

	6.	The Licensee shall review its compliance with the terms of the Separation Plan, together with the Director and in the light of its reports and of any reports of the Compliance
Officer, at least once every 6 months during the currency of this direction. 

  

	7.	When the Licensee reviews its compliance under paragraph 6 above, or at any other time when there is a material change in the Licensee’s circumstances, the Director may (giving
his reasons) request that the Licensee review the terms of the Separation Plan with a view to its amendment. The Licensee shall, within 28 days of any such request, propose changes to the relevant part of the Plan. Any such changes shall require to
be approved by the Director. 

  

	8.	The Licensee may at any time request the Director to approve changes to the Separation Plan. 

 Confidential Information 
  

	9.	Subject to paragraph 10 below, and save as provided for in the Separation Plan, the Licensee shall not engage for the purposes of the Distribution Business the same employees,
agents, advisers, consultants or contractors as are engaged for the purposes of any other business of itself (or any affiliate or related undertaking). 

  

 312 

	10.	Paragraph 9 above shall not apply insofar as: 

  

	 	(a)	in the case of agents, advisers, consultants or contractors engaged by the Distribution Business and also by any other business of the Licensee (or by any affiliate or related
undertaking) (“the appointees”), the Licensee has used all reasonable endeavours to ensure that: 

  

	 	(i)	the Distribution Business does not give any cross-subsidy to or receive any cross-subsidy from that other business; and 

  

	 	(ii)	the appointees cannot have access to confidential information about the Distribution Business unless effective arrangements are maintained in place which prevent the use or
disclosure of such information in any way which would obtain a commercial advantage for any other business and that such information is used only for the purpose of the Distribution Business or any external distribution activities of the Licensee;

 or 
  

	 	(b)	in any particular case, the Licensee has obtained the prior written approval of the Director. 

 Duration and Interpretation 
  

	11.	The direction in respect of paragraph 2 to 4 of Condition 12 shall cease to have effect on 31 March 2002. The direction in respect of paragraph 5 to 6 of Condition 12 shall
cease to have effect on 31 March 2002, unless on or before that date the Licensee has demonstrated to the reasonable satisfaction of the Director that it is, and will remain, in compliance with the requirements of paragraph 7 (c) of
Condition 12, in which event this direction shall cease to have effect on 31 March 2005. 

  

	12.	Words and phrases used in this direction shall, unless the contrary intention appears, have the same meaning as in the public electricity supply licence held by the Licensee.

  

 313 

 PAM BARRETT 
  

					
	 Authorised on behalf of the Director
	 	 19 April 2000
	 	 

  

 314 

 Direction issued under Condition 12 of the Public Electricity Supply Licence of Manweb plc now Standard Condition
39 of this licence (19.04.00) 
 The Electricity Act 1989 
 Sections 6 and 7 
 Public Electricity Supply Licences granted to Scottish Power
UK plc and Manweb plc 
 Direction 
 of the 
 Director General of Electricity Supply 
 Whereas – 
  

	(1)	Scottish Power UK plc (“SP”) and Manweb plc (“Manweb”) are the holders of public electricity supply licences granted under section 6(1)(c) of the Electricity Act
1989 (the SP and Manweb Licences respectively). 

  

	(2)	SP and Manweb are members of the same group of companies. 

  

	(3)	Condition 9 in Part V of the SP Licence and condition 12 of the Manweb Licence (the “Conditions”) require the Distribution Businesses of SP and of Manweb to have
information separation and managerial and operational independence from other businesses of SP and of Manweb. 

  

	(4)	Paragraph (7) of each of the Conditions provides that the Director may issue a direction relieving each licence holder from certain of its obligations under the Conditions.

  

	(5)	SP and Manweb each have requested the Director to issue a direction relieving them from the above mentioned obligations to the extent necessary for the Distribution Businesses of SP
and Manweb to be managed and operated as a single business. 

  

 315 

	(6)	In response to the request the Director is satisfied that, having regard to the terms of paragraph (7) of the Conditions, he is entitled to issue directions in the manner
hereinafter appearing. 

 NOW THEREFORE THE DIRECTOR ISSUES THE FOLLOWING DIRECTION – 
  

	1.	The terms “Distribution Business of SP” and “Distribution Business of Manweb” have the meaning given to the term “Distribution Business” in the SP and
Manweb licences respectively. 

  

	2.	This Direction is issued for the purposes of the paragraphs numbered 7 in both Condition 9 in Part V of the SP Licence and Condition 12 of the Manweb Licence.

  

	3.	SP and Manweb are relieved of their obligations under paragraphs 1 to 6 of Condition 9 in Part V of the SP Licence and Condition 12 of the Manweb Licence respectively to such extent
as is necessary for the management and operation of the Distribution Business of SP and the Distribution Business of Manweb to be managed and operated as a single business subject to the conditions that – 

  

	 	(a)	in the case of paragraph 5 and sub-paragraph 6(b) of the Conditions, any arrangements for the use of or access to premises, systems, equipment facilities, property or personnel by
both the Distribution Businesses of SP and of Manweb: 

  

	 	(i)	do not involve a cross-subsidy being given to the SP Distribution Business from the Manweb Distribution Business or received from the SP Distribution Business by the Manweb
Distribution Business; 

  

	 	(ii)	obtain for the Distribution Businesses, in the most efficient and economical manner possible, the use of the relevant premises, systems, equipment, facilities, property or
personnel; and 

  

 316 

	 	(iii)	do not restrict, distort or prevent competition in the generation or supply of electricity; and 

  

	 	(b)	nothing in this Direction shall relieve either SP of Manweb from any obligation in respect of any Separation Plan prepared for the purpose of or in relation to any other Direction
given pursuant to paragraph 7 of either of the Conditions; 

  

	4.	This Direction shall cease to have effect on the earlier of 

  

	 	(a)	notification by the Director to SP and to Manweb that he is satisfied that there has been a material failure to comply with the condition set out in paragraph 3 above;

  

	 	(b)	the Conditions ceasing to have effect; or 

  

	 	(c)	the expiry of 28 days from the date of service on the Director by either SP or Manweb of a request for the revocation of the Direction. 

 Pam Barrett 
 Authorised in that
behalf by 
 the Director General of 
 Electricity Supply 
 Date 19.4.2000 
  

 317 

 Direction issued under Condition 12 of the Public Electricity Supply Licence of Manweb plc now Standard Condition
39 of this licence (28.07.00) 
 The Electricity Act 1989 
 Sections 6 and 7 
 Electricity Transmission Licence granted to Scottish Power
(UK) plc 
 Public Electricity Supply Licences granted to Scottish Power (UK) plc and Manweb plc 
 Direction 
 of the 
 Director General of Electricity Supply 
 Whereas – 
  

	(1)	Scottish Power (UK) plc (“SP”) is the holder of a transmission licence (“the Transmission Licence”) granted under section 6(1)(b) of the Electricity Act 1989
(“the Act”). 

  

	(2)	SP and Manweb plc (“Manweb”) are the holders of public electricity supply licences granted under section 6(1)(c) of the Act (“the SP PES Licence” and “the
Manweb PES Licence” respectively). 

  

	(3)	SP and Manweb are members of the same group of companies. 

  

 318 

	(4)	Condition 8 in Part IV of the Transmission Licence (“Condition 8”) prohibits SP from disclosing confidential information. 

  

	(5)	Condition 8A in Part IV of the Transmission Licence (“Condition 8A”) requires SP to maintain the full managerial and operational independence of the Transmission Business
of SP from other businesses of SP and of its affiliates and related undertakings. 

  

	(6)	Paragraph (9) of Condition 8A provides that the Director in certain circumstances may issue a direction relieving SP of its obligations under Condition 8 and under paragraphs
1(a), 2 and 8 of Condition 8A to such extent and subject to such terms and conditions as he may specify in that direction. 

  

	(7)	Condition 9 in Part V of the SP PES Licence (“Condition 9”) and Condition 12 of the Manweb PES Licence (“Condition 12”) require the Distribution Businesses of SP
and of Manweb to have information separation and managerial and operational independence from other businesses of SP and of Manweb. 

  

	(8)	Paragraph (7) of each of the Condition 9 and Condition 12 provides that the Director in certain circumstances may issue a direction relieving SP and Manweb from certain of
their obligations under the Conditions. 

  

	(9)	SP and Manweb have requested the Director to issue directions relieving them from their above mentioned obligations to the extent necessary for the Transmission and Distribution
Businesses of SP to be managed and operated as a single business with the Distribution Business of Manweb. 

  

	(10)	In response to the request the Director is satisfied that, having regard to the terms of paragraph (9) of Condition 8A and to paragraph (7) of each of Condition 9 and
Condition 12, he is entitled to issue a direction in the manner hereinafter appearing. 

  

 319 

 NOW THEREFORE THE DIRECTOR ISSUES THE FOLLOWING DIRECTION - 
  

	1.	Except where the context requires otherwise, any terms used in this direction that are defined in Part 1 of the composite document setting out the generation and public electricity
supply licences of SP and the Transmission Licence shall have the meaning given to them in that Part. 

  

	2.	This direction is issued for the purposes of paragraph (9) of Condition 8A and of paragraph (7) of each of Condition 9 and Condition 12. 

  

	3.	SP is relieved of its obligations under Condition 8 and paragraphs 1(a), 2 and 8 of Condition 8A and SP and Manweb are relieved of their obligations under paragraphs 1 to 6 of
Condition 9 and Condition 12 respectively to such extent as is necessary for the Transmission and Distribution Businesses of SP to be managed and operated as a single business with the Distribution Business of Manweb subject to the conditions that
– 

  

	 	(a)	any arrangements for the use of or access to premises, systems, equipment, facilities, property or personnel by the Transmission and Distribution Businesses of SP and the
Distribution Businesses of Manweb; 

  

	 	(i)	do not involve a cross-subsidy being given by any one of the Transmission or Distribution Businesses of SP or the Manweb Distribution Business to any other of those businesses;

  

	 	(ii)	obtain for the Transmission and Distribution Businesses of SP and the Manweb Distribution Business, in the most efficient and economical manner possible, the use of the relevant
premises, systems, equipment, facilities, property or personnel; and 

  

	 	(iii)	do not restrict, distort or prevent competition in the generation or supply of electricity; 

  

 320 

	 	(b)	nothing in this direction shall relieve either SP or Manweb from any obligation in respect of any Separation Plan prepared for the purpose of any of the conditions of the SP and
Manweb PES Licences; and 

  

	 	(c)	nothing in this direction shall relieve either SP or Manweb from any obligation imposed on them by Directive 96/92/EC. 

  

	4.	This direction shall cease to have effect on the earlier of – 

  

	 	(a)	notification by the Director to SP and to Manweb that he is satisfied that there has been a material failure to comply with the condition set out in paragraph 3 above;

  

	 	(b)	Condition 8, Condition 8A, Condition 9 or Condition 12 ceasing to have effect; or 

  

	 	(c)	the expiry of 28 days from the date of service on the Director by either SP or Manweb of a request for the revocation of the direction. 

 The Official Seal of the Director General 
 of Electricity Supply hereunto affixed is 
 authenticated by 
 Charles Coulthard 
 Authorised in
that behalf by the 
 Director General of Electricity Supply 
 Date 28 July 2000 
  

 321 

 Consent issued under Standard Condition 47 of this licence (01.10.01) 
 To Manweb plc 
 Manweb House 
 Chester Business Park 
 Wrexham Road 
 Chester 
 CH4 9RF 
 Consent under Distribution Standard Licence Condition 47 
  

	1.	This consent is issued by the Gas and Electricity Markets Authority (“the Authority”) to the Licensee under paragraph 1 of the above condition (“the Condition”).

  

	2.	The Authority hereby consents to the Licensee being a party to a group registration scheme with HM Customs & Excise for value added tax (“VAT”) purposes, subject
to the following condition, namely that throughout the period during which such registration subsists, the Licensee shall have the benefit of a legally enforceable undertaking and indemnity from the controlling member of the VAT group in respect of
which the registration has been made whereby the Licensee is kept indemnified from any liability to VAT (including interest, penalties and costs) which does not arise out of the authorised business of the Licensee under the Licence but which is
claimed against the Licensee as a result of such group registration. 

  

	3.	This consent shall have effect on and from the date specified below. It shall remain in effect until the Authority shall withdraw it or replace it by a further consent made under
the Condition. 

  

 322 

	4.	Words and expressions used in this consent have the meaning attributed to them in the said Standard Licence Conditions. 

 Dated: 1 October 2001 
 Signed 
 John Neilson 
 Duly authorised in that behalf by the Authority 
  

 323 

 General Consent issued under Standard Condition 29 of this licence (01.10.01) 
 THE ELECTRICITY ACT 1989 (AS AMENDED) 
 ELECTRICITY DISTRIBUTION LICENCES 
 GENERAL CONSENT ISSUED PURSUANT TO STANDARD LICENCE
CONDITION 29 
 (DISPOSAL OF RELEVANT ASSETS) OF THE ELECTRICITY DISTRIBUTION LICENCE 
 This direction is issued by the Gas and Electricity Markets Authority (“the Authority”) under paragraph 3(a)(i) of Condition 29 (Disposal of relevant assets)
in the standard licence conditions of the electricity distribution licences granted or treated as granted under section 6(1)(c) of the Electricity Act 1989 (as amended) (“the Act”). 
 The provisions of this direction are applicable to, and available for, every holder (“the licensee”) of such an electricity distribution licence (“the
licence”). The direction takes effect on and from the date specified below. 
 The Authority hereby directs that the licensee may enter into an
agreement or arrangement whereby operational control of a relevant asset or relevant assets ceases to be under the sole management of the licensee without giving prior notice in any case where the agreement or arrangement (for these purposes called
“the transaction”) complies in all respect with the terms set out below: 
  

	1.	The transaction shall be consistent with all applicable conditions contained in the licence. 

  

	2.	Any other consent or clearance required under statute or under the licence in respect of the transaction shall have been obtained. 

  

 324 

	3.	The transaction shall provide for the supply of a service or the provision of a resource which relates to a relevant asset or relevant assets by a counter-party (“the resource
provider”) on behalf of the licensee. 

  

	4.	The resource provider shall be and remain an affiliate of the licensee but shall not be a holding company of the licensee. 

  

	5.	The transaction shall be effected by contract made between the licensee and the resource provider; such contract shall be binding and enforceable both in Great Britain and in any
other jurisdiction in which the resource provider has its principal place of business; and the contract shall contain provisions to the following effect: 

  

	 	(a)	no force majeure or equivalent provision in the contract shall excuse any failure on the part of the licensee, or the resource provider acting on its behalf, to comply with the
licensee’s statutory or licence obligations unless (and to the extent that) the event or circumstance in question would have excused the licensee under the Act or the licence if it had itself performed the service or provided the resource;

  

	 	(b)	responsibility for performance of all obligations to which the contract relates shall be clearly specified, subject to the overriding requirement that the licensee remains
ultimately responsible for all statutory and licence obligations applicable to the licensee’s business; 

  

	 	(c)	the resource provider shall covenant with the licensee to refrain from any action which would then be likely to cause the licensee to breach any of its licence or statutory
obligations; 

  

	 	(d)	the resource provider shall disclose to the licensee the basis or bases of all charges for services provided or supplies made pursuant to the contract, together with sufficient
information and analysis to support the basis for the calculation of the total sum payable by the licensee; and the resource provider shall not raise any objection to, or seek to prevent, disclosure of such information to the Authority.

  

 325 

	 	(e)	the licensee shall be free, at any time after the fifth anniversary of the commencement of the contract, without penalty and on reasonable notice, to resource any service or supply
from an alternative source of its choosing if more favourable terms become available; and 

  

	 	(f)	the resource provider shall be under obligation to provide to the licensee any information within its possession or control which the licensee may from time to time require in order
to enable the licensee: 

  

	 	(i)	to comply with any request by the Authority for information or reports pursuant to Condition 24 (Provision of Information to the Authority) of the licence (subject to paragraphs 5
and 7 of that condition); 

  

	 	(ii)	to assess the performance or position of the resource provider or any of its subsidiaries with respect to the provision of any service or supply made to the licensee; or

  

	 	(iii)	to monitor adherence by the resource provider to the terms of the contract. 

  

	6.    (1)	The licensee shall procure from that company or other corporate body which is from time to time the ultimate holding company of the licensee and the resource provider, or from such
other corporate body as the Authority may from time to time agree, acknowledgements and legally enforceable undertakings in favour of the licensee in the form annexed to this direction and headed Form A. Such acknowledgements and undertakings shall
be obtained within seven days of the company or other corporate body in question (“the covenantor”) becoming such ultimate holding company and shall remain in force for so long as the covenantor remains such ultimate holding company.

  

	 	(2)	For the purpose of this paragraph “ultimate holding company” means the company or other corporate body which is the holding company of both the licensee and the resource
provider and is not itself a subsidiary of another company or corporate body. 

  

 326 

	 	(3)	The licensee shall: 

  

	 	(a)	deliver to the Authority evidence (including a copy of the acknowledgements and undertakings) that the licensee has complied with its obligation to procure acknowledgements and
undertakings pursuant to this paragraph; 

  

	 	(b)	inform the Authority immediately in writing if the directors of the licensee become aware that any such undertaking has ceased to be legally enforceable or that its terms have been
breached; and 

  

	 	(c)	comply with any direction from the Authority to enforce any such undertaking. 

  

	 	(4)	The licensee shall not, save with the consent in writing of the Authority, obtain or continue to obtain the service or resource in question from the resource provider at any time
when: 

  

	 	(a)	the specified acknowledgements and undertakings are not in place; or 

  

	 	(b)	there is an unremedied breach of any undertaking; or 

  

	 	(c)	the licensee is in breach of any direction issued by the Authority under sub-paragraph (3) of this paragraph. 

  

	7.	The consent given by this direction applies only for the purpose of the said Condition 29 and shall not apply or be deemed to apply for any other purpose. 

 

	8.	Words or phrases in this direction which are defined for the purposes of the licence shall have the same meaning as in the licence. 

 Dated 1 October 2001 
  

			
	Signed	 	  

 Richard Ramsay 
 duly authorised by the Authority in that behalf 
  

 327 

 ANNEXURE TO THE DIRECTION BY THE GAS AND ELECTRICITY MARKETS AUTHORITY MADE PURSUANT TO STANDARD CONDITION 29 IN THE
ELECTRICITY DISTRIBUTION LICENCE ON THE                      2001 
 Form A 
 Acknowledgements and Undertakings 
 Acknowledgements 
 The covenantor acknowledges to the licensee: 
  

	(1)	that it is in the best interest of the covenantor that the licensee complies with its statutory and licence obligations; and 

  

	(2)	that all matters relating to the enforcement of the licensee’s rights under the relevant contract(s) shall be reserved to the directors of the licensee without regard to other
interests. 

 Undertakings 
 The covenantor undertakes to the licensee: 
  

	(1)	to procure that the resource provider will: 

  

	 	(a)	refrain from any action which would then be likely to cause the licensee to breach any of its statutory or licence obligations; 

  

	 	(b)	provide the licensee with any information within its possession or control which the licensee may from time to time require in order to enable the licensee:

  

 328 

	 	•	 	to comply with any request by the Authority for information or reports pursuant to Condition 24 (Provision of Information to the Authority) of the licence (subject to paragraphs 5
and 7 of that condition); 

  

	 	•	 	to assess the performance or position of the resource provider or any of its subsidiaries with respect to the provision of any service or supply made to the licensee; or

  

	 	•	 	to monitor adherence by the resource provider to the terms of the contract; 

  

	 	(a)	not unduly discriminate in favour of, or against, the licensee in the provision to it of supplies or services; and 

  

	 	(b)	not take any action which would constitute disposal of, or relinquishment of operation control over, any asset to which Condition 29 of the licence applies save in accordance with
the requirements of that condition and any consent issued by the Authority under it (other than to the licensee upon the expiry or termination of any relevant contract in accordance with its terms); 

  

	 	(1)	to procure that any contract between the licensee and the resource provider shall comply with the requirements set out in the direction to which this form is annexed and shall not
be amended so as to cease in any way to be compliant with those requirements; and 

 to procure that the resource provider has and maintains
resources and operating capacity at a level sufficient to ensure efficient performance of the contract and the efficient discharge of the relevant obligations of the licensee. 
  

 329 

 Consent issued under Condition 9 of this licence 
 

 
 Bringing choice and 
 value to customers 
 Mike Kay, Electricity Regulatory 
 Affairs Manager 
 Chairman of the Distribution Code 
 Review Panel of England and Wales 
 United Utilities plc 
 Dawson House 
 Great Sankey 
 Warrington WA5 3LW 
 Distribution Code
Change - Approval of Modification 13 
 On 1 March 2002, the Chairman of the Distribution Code Review Panel of England and Wales requested, on behalf
of the Electricity Distribution Licence holders of England and Wales, that the Gas and Electricity Markets Authority (the Authority) approve Modification 13 of the Distribution Code. 
 Modification 13 has been made to allow for the establishment of a Distribution Code Review Panel of Great Britain. 
 These changes have been consulted on and agreed by the members of the Distribution Code Review Panel. 
 The Authority hereby approves Modification 13 of the Distribution Code, pursuant to paragraph 3 of Condition 9 of the Electricity Distribution Licence Standard
Conditions, to take effect on the establishment of the Distribution Code Review Panel of Great Britain”. 
 Dated
13 March 2002 
 

 
 John Scott 
 Technical Director 
 Authorised on behalf of the Authority 
 The Office of Gas and Electricity Markets, 9 Millbank, London, SW1P 3GE Tel 020 7901
7000 Fax 020 7901 7066 www.ofgem.gov.uk 
  

 330 

 Consent issued under Condition 29 of this licence 
 27 June 2002 
 

 
 Bringing choice and 
 value to customers 
  

			
	Jeremy Blackford	  	 Our Ref: GR/asset disp

 SP Transmission and Distribution 
 SP Manweb plc 
 PowerSystems 
 Prenton Way 
 Prenton CH43 3ET 
 Consent issued by the
Gas and Electricity Markets Authority to the Disposal of Relevant Assets under Condition 29 of the Electricity Distribution Licence 
 With reference to
your letter of 14 May 2002, seeking consent to the disposal of equipment (at Flint, Flintshire), I can confirm that the Gas and Electricity Markets Authority (the “Authority”) has no objection to the Disposal on the basis of the
information supplied. 
 The Authority hereby consents to the Disposal pursuant to paragraph 4(a) of Condition 29 of the Electricity Distribution licence
held by SP Manweb plc. 
 A copy of your letter is attached. This consent has been placed in Ofgem’s public register. 
 Dated: 27 June 2002 
 SIGNED on behalf of the Authority 
 

 
 John Scott 
 Technical Director 
 Authorised for that purpose by the Authority 
 The Office of Gas and Electricity Markets, 9 Millbank, London, SW1P 3GE Tel
020 7901 7000 Fax 020 7901 7066 www.ofgem.gov.uk 
  

 331 

 Direction issued under Paragraph 10 of Special Condition G of the Distribution Licence 
 NOTICE OF REASONS FOR DECISION UNDER SECTION 49A(l)(c) OF THE ELECTRICITY ACT 1989 
 The Gas and Electricity Markets Authority (“the Authority”) hereby gives notice pursuant to section 49A(1)(c) of the Electricity Act 1989 (“the Act”) as follows; 
  

	1.	The Authority has decided to give a direction under paragraph 10 of Special Condition G (“the Condition”) of the distribution licence (“the Licence”) treated as
granted under section 6(1)(c) of the Electricity Act 1989 (“the Act”) to SP Manweb pIc (“the Licensee”). 

  

	2.	The Authority has carried out a consultation exercise in accordance with paragraph 10A of the Condition. 

  

	3.	In summary, the effect of the direction is to revise the values of the specified information in column A of Table A below so as to be those set out in Column B of Table A below.

 Table A: Effect of the direction on the Licensee1 
  

			
	 Column A
	  	Column B
	 CIISt for
the year commencing 1 April 2002
	  	42.55
	 CMLISt
for the year commencing 1 April 2002
	  	56.39

  

	4.	The reasons why the Authority has decided to give this direction are set out in the annex to this notice, In reaching its decision to issue a direction under paragraph 10 the
Condition the Authority has taken account of all representations and objections it has received to the consultation under paragraph 10A of the Condition. 

  

	5.	A copy of the direction and other documents referred to in this notice are available (free of charge) from the Ofgem library (telephone 020 7901 1600). 

 Dated the 5 July 2004 
 

 
 Martin Crouch 
 Director, Electricity Distribution 
 Duly authorised by the Authority 

	1	See paragraph 6 of Special Condition G 

  

 332 

  

	To:	The Company Secretary 

 3 Prenton Way

 Prenton 
 CH43
3ET 
 [Registered No. 02366937] 
 DIRECTION UNDER PARAGRAPH 10 OF SPECIAL CONDITION G OF THE DISTRIBUTION LICENCE 
 Whereas: 
  

	1.	SP Manweb pIc (“the Licensee”) is the holder of a licence (“the Licence”) treated as granted under section 6(1)(c) of the Electricity Act 1989 (“the
Act”) to distribute electricity for the purpose of giving a supply to any premises or enabling a supply to be so given in its authorised area for the term and upon the conditions specified in the Licence. 

  

	2.	The Gas and Electricity Markets Authority (“the Authority”) has carried out a consultation exercise in accordance with paragraph 10A of Special Condition G (“the
Condition”) of the Licence. 

  

	3.	The Authority has considered all representations and objections made by the Licensee and has had regard to all relevant information and circumstances, 

  

	4.	Pursuant to paragraph 10 of the Condition: 

  

	 	(a)	the Licensee considers that its performance for calculating Qt has been materially and adversely affected by an exceptional event referred to in Annex 2 to the notice given under paragraph 10A of the Condition (the “reasons document”); 

  

	 	(b)	the Licensee notified the Authority of the event within 14 days of the date upon which the Licensee considered such adverse effect had ceased; 

  

	 	(c)	after the end of the relevant year (2002/03) in which the event occurred, the consortium of Mott-MacDonald and British Power International (“together known as the
examiner”) had reported to the Authority in respect of the event and its effect; 

  

	 	(d)	the Licensee provided such other information as the Authority required; and 

  

	 	(e)	the Authority is satisfied that the event of 27 to 31 October 2002 is an exceptional event having regard to the criteria contained or referred to in the conclusions
document1; 

 Now, for the reasons specified in the notice issued pursuant to paragraph 10A of the Condition, in the Reasons document for the Authority’s direction under section 49A(1)(c) of the Act, the Authority directs under paragraph 10 of the
Condition that for the purpose of calculating Qt in respect of the relevant year in which the event occurred, the
constituent data relevant to the event shall be adjusted as follows: 
  

	(1)	In respect of the event of 27 to 31 October 2002, CIISt for the year commencing 1 April 2002 shall be adjusted from 50.47 to 42.55 and CMLISt for the
year commencing 1 April 2002 shall be adjusted from 112.06 to 56.39. 

  

 333 

 Overall Distribution Standards of Performance 

	1	“the conclusions document” means the document issued by the Authority entitled “Information and Incentives project lncentive Schemes Final Proposals
December 2001 78/01”, paragraph 2.60, page 25 

 In respect of the event of 27 to 31 October 2002, the number of customers affected
for the purpose of Service 5 of the Overall Distribution Standards of Performance shall be adjusted by the Licensee in accordance with the direction under paragraph 10 of the Condition. 
 Dated the 24 June 2004 
 

 
 Martin Crouch 
 Director, Electricity Distribution 
 Duly authorised by the Authority 
  

 334#500 Million Multicurrency Revolving Credit Facility for Scottish Power plc

 Exhibit 4.11 
  

			
	CONFORMED COPY	 	

 Allen & Overy LLP 
 AGREEMENT 
 For 
 SCOTTISH POWER PLC 
 arranged by

 THE BANK OF TOKYO-MITSUBISHI, LTD. 
 BNP PARIBAS 
 and 
 THE ROYAL BANK OF SCOTLAND PLC 
 £500,000,000 
 MULTICURRENCY REVOLVING CREDIT FACILITY 
 20 December 2005 

 CONTENTS 
  

					
	Clause	  	 	  	Page
	1.	  	Interpretation	  	1
	2.	  	The Facility	  	13
	3.	  	Purpose	  	14
	4.	  	Conditions Precedent	  	14
	5.	  	Utilisation - Loans	  	14
	6.	  	Repayment	  	16
	7.	  	Prepayment and Cancellation	  	17
	8.	  	Interest	  	18
	9.	  	Optional Currencies	  	20
	10.	  	Payments	  	21
	11.	  	Taxes	  	23
	12.	  	Market Disruption	  	25
	13.	  	Increased Costs	  	25
	14.	  	Illegality and Mitigation	  	26
	15.	  	Representations and Warranties	  	27
	16.	  	Undertakings	  	31
	17.	  	Default	  	37
	18.	  	The Agent and The Mandated Lead Arrangers	  	41
	19.	  	Fees	  	45
	20.	  	Expenses	  	46
	21.	  	Stamp Duties	  	46
	22.	  	Indemnities	  	46
	23.	  	Evidence and Calculations	  	47
	24.	  	Amendments and Waivers	  	48
	25.	  	Changes to the Parties	  	48
	26.	  	Disclosure of Information	  	51
	27.	  	Set-Off	  	51
	28.	  	Pro Rata Sharing	  	51
	29.	  	Severability	  	52
	30.	  	Counterparts	  	52
	31.	  	Notices	  	53
	32.	  	Governing Law	  	54
	33.	  	Jurisdiction	  	54
	34.	  	Service of Process	  	54

  

					
		 		 	22 December 2005

					
	Schedule	  	  	  	Page
	1.	  	Original Parties	  	55
	2.	  	Conditions Precedent Documents	  	56
	3.	  	Calculation of the Mandatory Cost	  	58
	4.	  	Form of Request	  	60
	5.	  	Form of Novation Certificate	  	61
	6.	  	Form of Legal Opinion of Allen & Overy LLP	  	62
	7.	  	Form of Legal Opinion of Maclay Murray & Spens	  	63
	8.	  	Existing Borrowings	  	68
	9.	  	Form of Confidentiality Undertaking	  	69
		
	Signatories	  	73

  

					
		 		 	22 December 2005

 THIS AGREEMENT is dated 20 December 2005 
 BETWEEN: 
  

	(1)	SCOTTISH POWER PLC (Registered No. SC193794) (the Company); 

  

	(2)	THE BANK OF TOKYO-MITSUBISHI, LTD., BNP PARIBAS and THE ROYAL BANK OF SCOTLAND PLC as mandated lead arrangers (in this capacity the Mandated Lead
Arrangers); 

  

	(3)	THE FINANCIAL INSTITUTIONS listed in Schedule 1 (Original Parties) as banks (the Original Banks); and 

  

	(4)	THE ROYAL BANK OF SCOTLAND PLC as agent (in this capacity the Agent). 

 IT IS AGREED as follows: 
  

	1.	INTERPRETATION 

  

	1.1	Definitions 

 In this Agreement: 
 Affiliate means a Subsidiary or a Holding Company (as defined in Section 736 of the Companies Act 1985) of a person and any other Subsidiary
of that Holding Company. 
 Agent’s Spot Rate of Exchange means the Agent’s spot rate of exchange for the purchase of the
relevant Optional Currency in the London foreign exchange market with Sterling at or about 11.00 a.m. on a particular day. 
 Availability
Period means the period from and including the date of this Agreement to and including the Final Maturity Date. 
 Balance Sheet
means, at any time, the latest published audited consolidated balance sheet of the Group on an historic cost basis. 
 Bank means:

  

	 	(a)	any Original Bank; and 

  

	 	(b)	any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 25 (Changes to the Parties). 

 Borrowings means any indebtedness in respect of: 
  

	 	(a)	moneys borrowed and debit balances at banks and other financial institutions; 

  

	 	(b)	any debt security including any bond, note or loan stock; 

  

	 	(c)	any acceptance under any acceptance credit facility opened by a bank or other financial institution; 

  

	 	(d)	the sale or discounting of receivables (except to the extent that such sale or discounting is on a non-recourse basis); 

  

					
		 	1	 	22 December 2005

	 	(e)	any lease which the Company accounts for as a finance lease as such term is described in the Statement of Standard Accounting Practices No. 21 (or any successor statement or
financial reporting standard); 

  

	 	(f)	any accrued fixed or minimum premium payable on the repayment or redemption of any instrument referred to in paragraph (b) above; 

  

	 	(g)	for the purposes of Clause 17.5 (Cross-default) only, any derivative transaction including interest rate swaps, currency swaps (including spot and forward exchange contracts), caps,
collars, floors and similar obligations (and, when calculating the value of any such derivative transaction, only the marked to market value shall be taken into account); 

  

	 	(h)	the acquisition cost of any asset to the extent payable before or after the time of acquisition or possession by the party liable where the advance or deferred payment is arranged
primarily as a method of raising finance or financing the acquisition of that asset; 

  

	 	(i)	any other transaction which has the commercial effect of a borrowing, including for the avoidance of doubt, any proceeds received by any member of the Group in connection with a
securitisation or transaction of a similar effect in respect of the assets of that member of the Group; and 

  

	 	(j)	any guarantee, indemnity and/or other form of assurance against financial loss by any member of the Group in respect of any indebtedness of any person of a type referred to in
paragraphs (a) to (i) above (in the case of paragraph (g) above, for the purposes of Clause 17.5 (Cross-default) only). 

 Any amount outstanding in a currency other than Sterling is to be taken into account at its Sterling equivalent calculated on the basis of the Agent’s spot rate of exchange at 11.00 a.m. on the day the relevant
amount falls to be calculated. However, indebtedness owing by one member of the Group to another member of the Group shall not be taken into account as Borrowings and, for the purposes of calculating the amount of Borrowings at any time: 

 

	 	(i)	deep discount borrowings will be valued at the amount attributed to them in the then latest Balance Sheet; and 

  

	 	(ii)	no item of indebtedness will be double counted by the inclusion of both the primary indebtedness and indebtedness arising under a guarantee, indemnity and/or other form of assurance
with respect to that primary indebtedness. 

 Business Day means a day (other than a Saturday or a Sunday) on which banks
are open for business in: 
  

	 	(a)	London; and 

  

	 	(b)	Glasgow; and 

  

	 	(c)	New York; and 

  

	 	(d)	in relation to a transaction involving an Optional Currency (other than euros) the principal financial centre of the country of that Optional Currency; and 

 

	 	(e)	in relation to a transaction involving euros, a TARGET Day. 

  

					
		 	2	 	22 December 2005

 Commitment means: 
  

	 	(a)	for an Original Bank, the amount set opposite its name in Schedule 1 under the heading Commitments and the amount of any other Commitment it acquires under Clause 25 (Changes
to the Parties); and 

  

	 	(b)	for any other Bank the amount of any Commitment it acquires under Clause 25 (Changes to the Parties), 

 to the extent not cancelled, transferred or reduced under this Agreement. 
 Consolidated Operating Cash Flows Before Movements in Working Capital are as calculated by reference to cash generated from operations after deducting or adding back (as the case may be) movements in
(a) inventories, (b) trade and other receivables and (c) trade payables as set out in the applicable notes to the Company’s published consolidated financial statements from time to time, PROVIDED ALWAYS THAT cash generated from
operations, inventories, trade and other receivables and trade payables shall be calculated consistently with the bases and policies adopted in calculating the Company’s published interim consolidated financial statements for the six months
period ending on 30 September 2005, as are set out in Note 10 (Reconciliation of profit before tax to cash generated from operations). 
 Dangerous Substance means any radioactive emissions and any natural or artificial substance (whether in solid or liquid form or in the form of a gas or vapour and whether alone or in combination with any other substance) capable (in
each case) of causing harm to man or any other living organism or damaging the environment or public health or welfare, including (without limitation) any controlled, special, hazardous, toxic, radioactive or dangerous waste. 
 Default means an Event of Default or an event which, with the giving of notice, lapse of time, or fulfilment of any other applicable condition (or
any combination of the foregoing), would constitute an Event of Default. 
 Disposal means the disposal by the Company of PacifiCorp to
MidAmerican substantially on the terms set out in the shareholders’ circular dated 30 June 2005. 
 Disposal Effective Date
means the date immediately prior to the date of completion of the Disposal or such other date as the Company and the Agent (acting on the instructions of the Majority Banks) agree. 
 EC means the European Community and its successors. 
 Electricity Act means the Electricity Act 1989, as amended by the Utilities Act 2000 and, unless the context so requires, all subordinate legislation made pursuant thereto. 
 Energy Laws means the Electricity Act and all other laws, regulations or requirements of any relevant authority (in so far as such regulations or
requirements have the force of law) relating to the generation, transmission, distribution, supply or trading of electricity or any other sources of energy in each jurisdiction in which any member of the Group carries on business at any time.

 Environmental Claim means any claim by any person in connection with: 
  

	 	(a)	a breach, or alleged breach, of Environmental Law; 

  

	 	(b)	any accident, fire, explosion or other event of any type involving an emission or substance which is capable of causing harm to any living organism or the environment; or

  

	 	(c)	any other environmental contamination. 

  

					
		 	3	 	22 December 2005

 Environmental Law means all laws, regulations, codes of practice, circulars, guidance notices and
the like (whether in the United Kingdom or elsewhere) whether or not having the force of law but if not having the force of law compliance with which is customary in the industry in which any member of the Group operates concerning the protection of
human health or the environment or the conditions of the work place or the generation, transportation, storage, treatment or disposal of Dangerous Substances. 
 Environmental Licence means any permit, licence, authorisation, consent or other approval required by any Environmental Law. 
 EURIBOR means for a Term of any Loan or overdue amount in euro: 
  

	 	(a)	the applicable Screen Rate; or 

  

	 	(b)	if no Screen Rate is available for that Term of that Loan or overdue amount, the arithmetic mean (rounded upward to four decimal places) of the rates as supplied to the Agent at its
request quoted by the Reference Banks to leading banks in the European interbank market, 

 as of 11.00 a.m. (Brussels time) on
the Rate Fixing Day for the offering of deposits in euro for a period comparable to that Term. 
 euro means the single currency of the
Participating Member States. 
 Event of Default means an event specified as such in Clause 17.1 (Events of Default). 
 Existing Facility Agreement means either the US$375,000,000 multicurrency credit facility dated 3 June 2004 (as amended on 26 September
2005) between, among others, the Company and the Agent or the US$625,000,000 credit facility granted as a part of the US$1,000,000,000 multicurrency credit facility dated 12 June 2003 between, amongst others, the Company and the Agent.

 Facility means the revolving credit facility referred to in Clause 2 (The Facility). 
 Facility Office means, subject to Clause 25.6 (Change of Facility Office)), the office(s) notified by a Bank to the Agent: 
  

	 	(a)	on or before the date it becomes a Bank; or 

  

	 	(b)	by not less than five Business Days’ notice, 

 as the
office(s) through which it will perform all or any of its obligations under this Agreement. 
 Fee Letter means: 
  

	 	(a)	the letter dated the date of this Agreement between the Mandated Lead Arrangers and the Company setting out the amount of various fees referred to in Clause 19.1 (Front-end fees);

  

	 	(b)	the letter dated the date of this Agreement between the Agent and the Company setting out the amount of various fees referred to in Clause 19.4 (Agent’s fee).

 Final Maturity Date means, subject to Clause 5.6 (Extension of Final Maturity Date), the fifth anniversary of the date
of this Agreement. 
  

					
		 	4	 	22 December 2005

 Finance Document means this Agreement, a Fee Letter, a Novation Certificate or any other document
designated as such by the Agent and the Company. 
 Finance Party means a Mandated Lead Arranger, a Bank or the Agent. 
 Group means at any time the Company and its Subsidiaries at that time. 
 Hedging Liabilities means indebtedness arising in respect of obligations of the type referred to in paragraph (g) of the definition of
Borrowings in this Clause 1.1. 
 IBOR means LIBOR or EURIBOR. 
 Interest Payable means, in respect of any financial period, all interest, discount and acceptance commission and all other continuing, regular or
periodic costs, charges and expenses in the nature of interest (whether paid, payable or capitalised) or treated for accounting purposes as interest, incurred by the Group in effecting, servicing or maintaining Total Consolidated Borrowings during
that period. 
 Interest Receivable means, in respect of any financial period, interest and amounts in the nature of interest received
during that period by the Group from persons outside the Group. 
 Investments means: 
  

	 	(a)	cash on current account or cash on deposit with, or certificates of deposit issued by, or bills of exchange accepted by, any bank incorporated in an OECD country from which proceeds
are readily remittable to the United Kingdom, and in each case, where the deposit or the maturity is for a duration of six months or less; and 

  

	 	(b)	bonds or treasury bills issued by an OECD government or agency, bonds rated single-A or above by a major rating agency and commercial paper rated A1 or P1 by a major rating agency,
in each case, where the proceeds of which are readily remittable to the United Kingdom. 

 LIBOR means for a Term of any
Loan or overdue amount (other than in euro): 
  

	 	(a)	the applicable Screen Rate; or 

  

	 	(b)	if no Screen Rate is available for the relevant currency or Term of that Loan or overdue amount, the arithmetic mean (rounded upward to four decimal places) of the rates, as
supplied to the Agent at its request, quoted by the Reference Banks to leading banks in the London interbank market, 

 as of
11.00 a.m. on the Rate Fixing Day for the offering of deposits in the currency of that Loan or overdue amount for a period comparable to that Term. 
 Licence means each licence or other similar authorisation granted by any relevant UK or US authority (as the case may be) to a member of the Group carrying on business in the United Kingdom or United States (as the case may be)
pursuant to any Energy Law or otherwise to permit it to carry out generation, transmission, distribution or supply of electricity or to trade electricity. 
 Loan means the principal amount of a borrowing by the Company under this Agreement or the principal amount outstanding of that borrowing. 
  

					
		 	5	 	22 December 2005

 Majority Banks means, at any time, Banks: 
  

	 	(a)	the aggregate of whose shares in the outstanding Loans and undrawn Commitments then represents 66 2/3 per cent. or more of the aggregate of all the outstanding Loans and undrawn Commitments of all the Banks; 

  

	 	(b)	if there is no Loan then outstanding, whose undrawn Commitments then aggregate 66 2/3 per cent. or more of the Total Commitments; or 

  

	 	(c)	if there is no Loan then outstanding and the Total Commitments have been reduced to zero, whose Commitments aggregated 66 2/3 per cent. or more of the Total Commitments immediately before the reduction. 

 Mandatory Cost means the cost of complying with certain regulatory requirements, expressed as a percentage rate per annum and calculated by the
Agent under Schedule 3 (Calculation of the Mandatory Cost). 
 Mandatory Subsidiaries means: 
  

	 	(a)	SP Distribution, SP Manweb, SP Transmission, SP UK and until the Disposal Effective Date, PacifiCorp; and 

  

	 	(b)	any Subsidiary to whom a Mandatory Subsidiary sells, transfers, grants, leases or otherwise disposes of any Licence, in whole or in part. 

 Margin means: 
  

	 	(a)	0.25 per cent. per annum; or 

  

	 	(b)	at any time, if different, the rate per annum determined by reference to the Company’s long term credit ratings assigned by either S&P or Moody’s (or any other rating
agency approved for this purpose by the Majority Banks) last published (and not withdrawn) at that time, as follows: 

  

					
	 Rating
	  	 Margin (% per annum)

	 S&P
	  	 Moody’s
	  	 
	A or better	  	A2 or better	  	0.175
	A-	  	A3	  	0.20
	BBB+	  	Baa1	  	0.25
	BBB	  	Baa2	  	0.30
	BBB- or lower (or if (1) the Borrower ceases to have such rating; or (2) an Event of Default is outstanding)	  	 Baa3 or lower (or if (1) the
 Borrower ceases to have such
 rating; or (2) an Event of
 Default is outstanding)
	  	0.40

 If S&P and Moody’s (and any other such approved rating agency) each assign long term
ratings to the Company, the Margin shall be determined by reference to the lowest rating of these rating agencies which is last published and not withdrawn. 
 Material Adverse Effect means any effect which, in the opinion of the Majority Banks, is or is reasonably likely to be materially adverse to the ability of the Company to perform any of its payment obligations
under any of the Finance Documents (taking into account resources available to it without breaching the terms of this Agreement from other members of the Group), or to comply with any of its obligations under Clause 16.11 (Financial covenants).

  

					
		 	6	 	22 December 2005

 Moody’s means Moody’s Investors Service, Inc. 
 Net Interest Payable means, in respect of any financial period, Interest Payable during that period less Interest Receivable during that period.

 Novation Certificate means a duly completed certificate, substantially in the form of Schedule 5 (Form of Novation Certificate).

 Ofgem means the Office of Gas and Electricity Markets. 
 Optional Currency means US$, euros or any other currency (other than Sterling) which is for the time being freely transferable and convertible into Sterling and deposits of which are readily available in the
London interbank market. 
 Original Group Accounts means the audited consolidated accounts of the Group for the year ended
31 March 2005. 
 Original Sterling Amount means: 
  

	 	(a)	the principal amount of a Loan denominated in Sterling; or 

  

	 	(b)	the principal amount of a Loan denominated in an Optional Currency translated into Sterling on the basis of the Agent’s Spot Rate of Exchange three Business Days before its
Utilisation Date. 

 PacifiCorp means PacifiCorp (a company incorporated in Portland, Oregon). 
 (until the Disposal Effective Date) PacifiCorp Facility means a US$800,000,000 loan facility for PacifiCorp dated 28 May 2004. 
 Participating Member State means a member state of the European Communities that adopts or has adopted the euro as its lawful currency under the
legislation of the European Community for Economic Monetary Union. 
 Party means a party to this Agreement. 
 Permitted Security Interest means: 
  

	 	(a)	any Security Interest created or outstanding with the prior written consent of the Majority Banks; 

  

	 	(b)	any lien or hypothecation arising by operation of law or contained in a contract for the sale of goods, supply of services or joint operation of assets entered into in the ordinary
course of trade of the company creating the same; 

  

	 	(c)	Security Interests not otherwise permitted under paragraphs (a) and (b) above provided that the aggregate principal amount of the indebtedness secured by Security
Interests permitted under this paragraph (c) shall not at any time exceed an amount equal to 15 per cent. of Tangible Consolidated Net Worth at that time; 

  

	 	(d)	any Security Interest created by a Project Finance Subsidiary to secure its Project Finance Borrowings; and 

  

					
		 	7	 	22 December 2005

	 	(e)	(until the Disposal Effective Date) any Security Interest created by PacifiCorp and permitted under clause 5.07 (Negative Pledge) of the PacifiCorp Facility.

 Principal Subsidiary means: 
  

	 	(a)	each Mandatory Subsidiary; and 

  

	 	(b)	any other Subsidiary or Subsidiaries of the Company to whom all or substantially all of the assets or business of a Principal Subsidiary are transferred. 

Principal Subsidiary Group means at any time the Principal Subsidiaries at that time. 
 Pro Rata Share means the proportion which a Bank’s Commitment bears to the Total Commitments at that time. 
 Project Finance Borrowings means any Borrowing which finances, and any Hedging Liabilities incurred in the financing of the acquisition,
development, ownership and/or operation of an asset: 
  

	 	(a)	which is incurred by a Project Finance Subsidiary; or 

  

	 	(b)	in respect of which the person or persons to whom such Borrowing is or may be owed by the relevant debtor (whether or not a member of the Group) has or have no recourse whatsoever
to any member of the Group (other than to a Project Finance Subsidiary) for the repayment thereof other than: 

  

	 	(i)	recourse to such debtor for amounts limited to the cash flow or net cash flow (other than historic cash flow or historic net cash flow) from such asset; and/or

  

	 	(ii)	recourse to such debtor for the purpose only of enabling amounts to be claimed in respect of such Borrowing in an enforcement of any Security Interest given by such debtor over such
asset or the income, cash flow or other proceeds deriving therefrom (or given by any shareholder or the like in the debtor over its shares or like interest in the capital of the debtor) to secure such Borrowing, provided that (I) the extent of
such recourse to such debtor is limited solely to the amount of any recoveries made on any such enforcement, and (II) such person or persons are not entitled, by virtue of any right or claim arising out of or in connection with such Borrowing, to
commence proceedings for the winding up or dissolution of the debtor or to appoint or procure the appointment of any receiver, trustee or similar person or officer in respect of the debtor or any of its assets (save only for the assets the subject
of such Security Interest); and/or 

  

	 	(iii)	recourse to such debtor generally, or directly or indirectly to a member of the Group, under any form of assurance, undertaking or support, which recourse is limited to a claim for
damages (other than liquidated damages and damages required to be calculated in a specified way) for breach of an obligation (not being a payment obligation or an obligation to procure payment by another or an indemnity in respect thereof or any
obligation to comply or to procure compliance by another with any financial ratios or other tests of financial condition) by the person against whom such recourse is available. 

 Project Finance Subsidiary means any Subsidiary of the Company: 
  

	 	(a)	which is a company whose principal assets and business are constituted by the ownership, acquisition, development and/or operation of an asset whether directly or indirectly;

  

					
		 	8	 	22 December 2005

	 	(b)	none of whose Borrowings in respect of the financing of such ownership, acquisition, development and/or operation of an asset benefits from any recourse whatsoever to any member of
the Group (other than the Subsidiary itself or another Project Finance Subsidiary) in respect of the repayment thereof, except as expressly referred to in paragraph (b)(iii) of the definition of Project Finance Borrowings in this Clause 1.1; and

  

	 	(c)	which has been designated as such by the Company by written notice to the Agent, provided that the Company may give written notice to the Agent at any time that any Project Finance
Subsidiary is no longer a Project Finance Subsidiary, whereupon it shall cease to be a Project Finance Subsidiary. 

 Qualifying Bank means an institution which is: 
  

	 	(a)	a bank which is within the charge to UK corporation tax in respect of, and beneficially entitled to, a payment of interest on a Loan made by a person that was a bank for the
purposes of section 349 of the Income and Corporation Taxes Act 1988 (as currently defined in section 840A of the Income and Corporation Taxes Act) at the time the Loan was made; or 

  

	 	(b)	a financial institution which is a resident (as defined in the appropriate double taxation agreement) in a country with which the UK has a double taxation agreement giving residents
of that country exemption from UK taxation on interest and which does not carry on a business in the UK through a permanent establishment with which the payment is effectively connected. 

 Rate Fixing Day means: 
  

	 	(a)	the first day of a Term for a Loan denominated in Sterling; or 

  

	 	(b)	the second Business Day before the first day of a Term for a Loan denominated in an Optional Currency (other than euros); or 

  

	 	(c)	the second TARGET Day before the first day of a Term for a Loan denominated in euros, 

 unless market practice differs in the Relevant Interbank Market for a currency, in which case the Rate Fixing Day for that currency will be determined by the Agent in accordance with market practice in the Relevant
Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Rate Fixing Day will be the last of those days). 
 Reference Banks means, subject to Clause 25.4 (Reference Banks), the principal London offices of BNP Paribas, The Bank of Tokyo-Mitsubishi, Ltd.
and The Royal Bank of Scotland plc. 
 Relevant Interbank Market means in relation to euros, the European interbank market and, in
relation to any other currency, the London interbank market. 
 Repayment Date means the last day of a Term for a Loan. 
 Request means a request made by the Company for a Loan, substantially in the form of Schedule 4 (Form of Request). 
 Reservations means the qualifications as to matters of law only contained in the legal opinions set out in Schedule 6 (Form of Legal Opinion of
Allen & Overy LLP) and Schedule 7 (Form of Legal Opinion of Maclay Murray & Spens). 
  

					
		 	9	 	22 December 2005

 Rollover Loan means one or more Loans: 
  

	 	(a)	to be made on the same day that a maturing Loan is due to be repaid; 

  

	 	(b)	the aggregate amount of which is equal to or less than the maturing Loan; 

  

	 	(c)	in the same currency as the maturing Loan; and 

  

	 	(d)	to be made for the purpose of refinancing a maturing Loan. 

 S&P means Standard & Poor’s Ratings Group, a division of the McGraw Hill Companies, Inc. 
 Screen Rate
means: 
  

	 	(a)	for LIBOR, the British Bankers Association Interest Settlement Rate; and 

  

	 	(b)	for EURIBOR, the percentage rate per annum determined by the Banking Federation of the European Union, 

 for the relevant currency and Term displayed on the appropriate page of the Telerate screen selected by the Agent. If the relevant page is replaced or the
service ceases to be available, the Agent (after consultation with the Company and the Banks) may specify another page or service displaying the appropriate rate. 
 Security Interest means any mortgage, pledge, lien, charge, assignment by way of security or subject to a proviso for redemption, assignation in security, standard security, hypothecation or security interest
or any other agreement or arrangement having the effect of conferring security. 
 SP Distribution means SP Distribution Limited
(Registered No. SC189125). 
 SP Energy Management means ScottishPower Energy Management Limited (Registered No.: SC215843).

 SP Manweb means SP Manweb plc (Registered No. 2366937). 
 SP Transmission means SP Transmission Limited (Registered No. SC189126). 
 SP UK means Scottish Power UK plc (Registered No. SC117120). 
 Sterling means the lawful currency for the time being of the UK. 
 Subsidiary means a
subsidiary within the meaning of Section 736 of the Companies Act 1985, as amended by Section 144 of the Companies Act 1989. 
 Tangible Consolidated Net Worth means at any time the aggregate of: 
  

	 	(a)	the amount paid up or credited as paid up on the issued share capital of the Company; and 

  

	 	(b)	the amount standing to the credit of the consolidated capital and revenue reserves of the Group; 

 based on the Balance Sheet but adjusted by: 
  

	 	(i)	adding any amount standing to the credit of the profit and loss account for the Group for the period ending on the date of the Balance Sheet, to the extent not included in
subparagraph (b) above and to the extent the amount is not attributable to any dividend or other distribution declared, recommended or made by any member of the Group; 

  

					
		 	10	 	22 December 2005

	 	(ii)	deducting any amount standing to the debit of the profit and loss account for the Group for the period ending on the date of the Balance Sheet, to the extent not included in
subparagraph (b) above; 

  

	 	(iii)	deducting any amount attributable to goodwill or any other intangible asset; 

  

	 	(iv)	deducting any amount attributable to a revaluation of assets after 31 March 2005 or, in the case of assets of a company which becomes a member of the Group after that date, the
date on which that company becomes a member of the Group unless in either case such revaluation is based on valuations by independent valuers; 

  

	 	(v)	reflecting any variation in the amount of the issued share capital of the Company and the consolidated capital and revenue reserves of the Group after the date of the Balance Sheet;

  

	 	(vi)	reflecting any variation in the interest of the Company in any other member of the Group since the date of the Balance Sheet; 

  

	 	(vii)	excluding any amounts required to be set aside for taxation payable by the Group; 

  

	 	(viii)	excluding any amount attributable to minority interests; and 

  

	 	(ix)	eliminating inconsistencies between the accounting principles applied in connection with the Balance Sheet and those applied in connection with the Original Group Accounts,

 as determined from the financial statements of the Group and compliance certificates delivered under, respectively, Clause
16.2 (Financial information) and Clause 16.5 (Compliance certificates). 
 TARGET Day means a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer payment system is open for the settlement of payments in euro. 
 Term means each period
determined under this Agreement by reference to which interest on a Loan or an overdue amount is calculated. 
 Total Commitments means
the aggregate for the time being of the Commitments, being £500,000,000 at the date of this Agreement. 
 Total Consolidated
Borrowings means, at any time, the aggregate principal amount (or amounts equivalent to principal, howsoever described) comprised in the Borrowings of the Company and its Subsidiaries at that time calculated on a consolidated basis. Any amount
outstanding in a currency other than Sterling (the Relevant Currency) is to be taken into account at its Sterling equivalent calculated on the basis of the Agent’s spot rate of exchange for the purchase of the Relevant Currency in the
London foreign exchange market with Sterling at or about 11.00 a.m. on the day the relevant amount falls to be calculated. 
 Total
Consolidated Net Borrowings means, at any time, Total Consolidated Borrowings less: 
  

	 	(a)	the aggregate principal amount of Investments beneficially owned by the Group free from Security Interests (to the extent the proceeds of the same are readily remittable to the UK)
at that time; and 

  

					
		 	11	 	22 December 2005

	 	(b)	any indebtedness of a member of the Group in respect of Borrowings which, as to prepayment, repayment or payment of principal, interest or other amounts in respect of such
Borrowings, are subordinated on terms satisfactory to the Majority Banks to any Borrowings made under this Agreement. 

 UK
means the United Kingdom. 
 UK Subsidiary means a Subsidiary of the Company incorporated in the UK. 
 US Dollars or US$ means the lawful currency for the time being of the United States of America. 
 US Subsidiary means a subsidiary of the Company incorporated in the United States of America. 
 Utilisation Date means the date of the advance of a Loan. 
  

	1.2	Construction 

  

	(a)	In this Agreement, unless the contrary intention appears, a reference to: 

  

	 	(i)	assets includes present and future properties, revenues and rights of every description; 

  

	 	(ii)	an authorisation includes an authorisation, consent, approval, resolution, licence (including any Licence), exemption, filing, registration and notarisation;

  

	 	(iii)	a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental body, agency,
department or regulatory, self-regulatory or other authority or organisation; 

  

	 	(iv)	a provision of a law is a reference to that provision as amended or re-enacted; 

  

	 	(v)	a Clause, Subclause or a Schedule is a reference to a clause of or a schedule to this Agreement; 

  

	 	(vi)	a person includes its permitted successors and assigns; 

  

	 	(vii)	a Finance Document or another document is a reference to that Finance Document or that other document as amended, novated or supplemented in writing;

  

	 	(viii)	taxes means any present or future tax, levy, impost, duty or other charge, deduction or withholding of a similar nature (including any related penalty or interest);

  

	 	(ix)	a time of day is a reference to London time; and 

  

	 	(x)	know your customer requirements are the checks that a Finance Party requests in order to meet its obligations under applicable money laundering regulations to identify a
person who is (or is to become) its customer. 

  

	(b)	Unless the contrary intention appears, a reference to a month or months is a reference to a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that: 

  

	 	(i)	if the numerically corresponding day is not a Business Day, the period will end on the next Business Day in that month (if there is one) or the preceding Business Day (if there is
not); 

  

					
		 	12	 	22 December 2005

	 	(ii)	if there is no numerically corresponding day in that month, that period will end on the last Business Day in that month; and 

  

	 	(iii)	notwithstanding subparagraph (i) above, a period which commences on the last Business Day of a month will end on the last Business Day in the next month or the calendar month
in which it is to end, as appropriate. 

  

	(c)	Unless the contrary intention appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement. 

  

	(d)	The index to and the headings in this Agreement are for convenience only and are to be ignored in construing this Agreement. 

  

					
	(e)	  	(i)	  	Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document may not enforce any of its terms under the Contracts (Rights of Third Parties)
Act 1999.
			
		  	(ii)	  	Notwithstanding any term of any Finance Document, the consent of any third party is not required for any variation (including any release or compromise of any liability under) or termination of
that Finance Document.

  

	2.	THE FACILITY 

  

	2.1	The Facility 

 Subject to the terms of this
Agreement, the Banks grant to the Company a committed multicurrency revolving credit facility under which the Banks agree to make Loans to the Company in an aggregate amount equal to the Total Commitments. 
  

	2.2	Number of Loans 

 No more than ten (10) Loans
shall be outstanding at any time. 
  

	2.3	Limits 

  

	(a)	The aggregate Original Sterling Amount of all outstanding Loans shall not exceed the Total Commitments. 

  

	(b)	No Bank is obliged to participate in a Loan if it would cause the Original Sterling Amount of the aggregate of its participations in the Loans to exceed its Commitment.

  

	2.4	Nature of a Finance Party’s rights and obligations 

  

	(a)	The obligations of a Finance Party under the Finance Documents are several. Failure of a Finance Party to carry out those obligations does not relieve any other Party of its
obligations under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. 

  

	(b)	The rights of a Finance Party under the Finance Documents are divided rights. A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce those
rights. 

  

					
		 	13	 	22 December 2005

	2.5	Change of Currency 

 If a change in any currency of
a country occurs, this Agreement will be amended to the extent the Agent acting reasonably and in consultation with the Company specifies to be necessary to reflect the change in currency and to put the Banks in the same position, so far as
possible, that they would have been in if no change in currency had occurred. 
  

	3.	PURPOSE 

  

	3.1	Loans 

  

	  	The Company shall apply each Loan towards: 

  

	 	(a)	its working capital requirements; and 

  

	 	(b)	refinancing the Existing Facility Agreements. 

  

	3.2	No obligation to monitor 

 Without affecting the
obligations of the Company in any way, no Finance Party is bound to monitor or verify the application of any Loan. 
  

	4.	CONDITIONS PRECEDENT 

  

	4.1	Documentary conditions precedent 

 The obligations
of each Finance Party to the Company under this Agreement are subject to the condition precedent that the Agent has notified the Company and the Banks that it has received all of the documents set out in Schedule 2 in form and substance satisfactory
to the Agent. 
  

	4.2	Further conditions precedent 

 The obligations of
each Bank to participate in a Loan are subject to the further conditions precedent that on both the date of the Request and the Utilisation Date for that Loan: 
  

	 	(a)	the representations and warranties in Clause 15 (Representations and Warranties) to be repeated on those dates are correct and will be correct immediately after the Loan is made;
and 

  

	 	(b)	no Default or, in the case of a Rollover Loan, no Event of Default is outstanding or could reasonably be expected to result from the making of the Loan. 

  

	5.	UTILISATION - LOANS 

  

	5.1	Receipt of Requests 

 The Company may borrow a Loan
if the Agent receives a duly completed Request, not later than 12.00 noon one Business Day before the applicable Rate Fixing Day. 
  

	5.2	Completion of Requests 

 A Request for a Loan will
not be regarded as having been duly completed unless: 
  

	 	(a)	the Utilisation Date is a Business Day falling within the Availability Period; 

  

					
		 	14	 	22 December 2005

	 	(b)	the principal amount of the Loan is a minimum of £10,000,000 and an integral multiple of £5,000,000 (or its equivalent in an Optional Currency) or the principal amount
of the Loan is equal to the balance of the undrawn Total Commitments as at the proposed Utilisation Date; 

  

	 	(c)	one Term is specified which: 

  

	 	(i)	does not extend beyond the Final Maturity Date; and 

  

	 	(ii)	is a period of one, two, three or six months. 

  

	 	(d)	the payment instructions comply with Clause 10 (Payments); 

  

	 	(e)	the amount selected under paragraph (b) above does not cause Clause 2.3 (Limits) to be contravened; and 

  

	 	(f)	if the currency selected is an Optional Currency it complies with Clause 9 (Optional Currencies). 

  

	5.3	Amount of each Bank’s participation in a Loan 

 The amount of each Bank’s participation in each Loan will be equal to the proportion of that Loan which its Commitment bears to the Total Commitments on the date of receipt of the relevant Request. 
  

	5.4	Notification of the Banks 

 The Agent shall promptly
notify each Bank of the details of the requested Loan and the amount of its participation in the Loan. 
  

	5.5	Payment of proceeds 

 Subject to the terms of this
Agreement, each Bank shall make its participation in each Loan available to the Agent for the Company on the relevant Utilisation Date. 
  

	5.6	Extension of Final Maturity Date 

  

	(a)	The Company may request that the Final Maturity Date be extended for a further period of 365 days by giving not less than 60, and not more than 90, days’ notice to the Agent
prior to the first anniversary of the date of this Agreement (the First Extension Option). 

  

	(b)	Without prejudice to its rights under (a) above, the Company may request that the Final Maturity Date be extended for a further period of 365 days (which may or may not be in
addition to an extension of 365 days pursuant to the First Extension Option) by giving not less than 60, and not more than 90, days’ notice to the Agent prior to the second anniversary of the date of this Agreement (the Second Extension
Option). 

  

	(c)	In the case of a Bank that has not previously agreed to the extension of 365 days requested under the First Extension Option, then pursuant to the Second Extension Option the
Company may make a request to that Bank for either an extension of an additional 365 day period or an additional 730 day period. 

  

	(d)	Upon receipt of a notice requesting an extension to the Final Maturity Date, the Agent shall promptly notify each Bank of this request. Each Bank shall have the right, in its
absolute discretion, to accept or decline any such request. Any Bank which wishes to accept the request shall notify the Agent of its acceptance not more than 45 days and not less than 20 days prior to the relevant anniversary of the date of this
Agreement. Where a Bank does not respond to a request as required in this Clause, that Bank will be deemed to have refused the request. 

  

					
		 	15	 	22 December 2005

	(e)	Where a Bank agrees to a request to extend the Final Maturity Date, the Final Maturity Date for that Bank’s uncancelled Commitment will be extended for a further period of 365
days in accordance with paragraph (a) and (b) above (or 730 days in accordance with paragraph (c) above) from the relevant anniversary of the date of this Agreement Signing Date. 

  

	(f)	Any request for an extension under this Clause is irrevocable. 

  

	(g)	As a result of provisions in this Clause it is possible that not all Banks will have the same Final Maturity Date applicable to their participations in the Facility. To the extent
that a Bank does or does not participate in either the First Extension Option or the Second Extension Option, the Final Maturity Date will vary as follows: 

  

	 	(i)	for a Bank which has refused to extend for both the First Extension Option and the Second Extension Option, the Final Maturity Date for that Bank shall remain as the fifth
anniversary of the date of this Agreement, 

  

	 	(ii)	for a Bank which has only agreed to extend for 365 days from the original Final Maturity Date under either the First Extension Option or the Second Extension Option, the Final
Maturity Date for that Bank shall be the date falling 365 days from the original Final Maturity Date; and 

  

	 	(iii)	for a Bank which has agreed to extend for 730 days from the Original Final Maturity Date by either agreeing to both the First Extension Option and the Second Extension Option or by
agreeing to a 730 day extension under only the Second Extension Option in accordance with paragraph (c) above, the Final Maturity Date for that Bank shall be the date falling 730 days from the original Final Maturity Date.

  

	(h)	However, if a Request is provided by the Company for a Loan the Utilisation Date of which would fall after the Final Maturity Date applicable to a Bank, that Bank shall not
participate in that Loan and that Bank’s Commitment shall be excluded from the calculation of the Total Commitments for the purpose of calculating the participations of the Banks in that Loan pursuant to Clause 5.3 (Amount of each Bank’s
participation in a Loan). 

  

	6.	REPAYMENT 

  

	(a)	The Company must repay each Loan made to it in full on its Repayment Date. 

  

	(b)	Subject to the other terms of this Agreement, any amounts repaid under paragraph (a) above may be re-borrowed. 

  

	(c)	Any amount of any Loan still outstanding on the applicable Final Maturity Date shall be repaid on that Final Maturity Date. 

  

	(d)	In relation to any outstanding Loan, if the Company does not serve a Request requesting a Loan with a proposed Utilisation Date on the last day of the Term for the outstanding Loan
in an amount at least equal to that Loan, the Company shall, unless it specifically notifies the Agent to the contrary not later than three Business Days prior to the last day of the relevant Term be deemed to have served a Request and to have made
the confirmations in paragraphs 2 to 4 inclusive of the form of request in Schedule 4 (Form of Request) to this Agreement requesting a Loan in an equal amount to the outstanding Loan, with a proposed Utilisation Date of the last day of the Term,
with a term of three months. The proceeds of the new Loan, when made in accordance with the terms of this Agreement, shall be applied in repayment of the outstanding Loan. 

  

					
		 	16	 	22 December 2005

	7.	PREPAYMENT AND CANCELLATION 

  

	7.1	Automatic cancellation of the Total Commitments 

 The Commitment of each Bank shall be automatically cancelled at close of business on the last day of the Availability Period. 
  

	7.2	Voluntary cancellation 

 The Company may, by giving
not less than five days’ prior notice to the Agent, cancel the unutilised portion of the Total Commitments in whole or in part (but, if in part, in a minimum amount of £10,000,000 or the balance of the unutilised Total Commitments,
whichever is lower). Any cancellation in part shall be applied against the Commitment of each Bank pro rata. 
  

	7.3	Voluntary Prepayment 

 The Company may, on giving
not less than five days’ prior notice to the Agent, prepay all or any part of the Loans (but, if in part, in a minimum Original Sterling Amount of £10,000,000 (or its comparable amounts in any Optional Currency) or the balance of the
outstanding Loans under the Facility, whichever is lower). Any partial prepayment of the Loans shall be applied pro rata against the participation of each Bank in that Loan. 
  

	7.4	Additional right of prepayment and cancellation 

 If
the Company is required to pay any amount to or for the account of a Bank under Clause 11 (Taxes) or Clause 13 (Increased Costs) the Company may, whilst the circumstances giving rise to the requirement continue, serve a notice of prepayment and
cancellation on that Bank through the Agent. On the date falling five Business Days after the date of service of the notice: 
  

	 	(a)	the Company shall prepay that Bank’s participation in all the Loans together with all other amounts payable by it to that Bank under this Agreement; and

  

	 	(b)	the Bank’s Commitment shall be cancelled. 

  

	7.5	Miscellaneous provisions 

  

	(a)	Any notice of prepayment and/or cancellation under this Agreement is irrevocable. The Agent shall notify the Banks promptly of receipt of any such notice. 

 

	(b)	All prepayments under this Agreement shall be made together with accrued interest on the amount prepaid. 

  

	(c)	No prepayment or cancellation is permitted except in accordance with the express terms of this Agreement. 

  

	(d)	Subject to the terms of this Agreement, any amount of a Loan repaid under this Agreement may subsequently be re-borrowed. 

  

	(e)	No amount of any Commitment cancelled under this Agreement may subsequently be reinstated. 

  

					
		 	17	 	22 December 2005

	7.6	Mandatory prepayment-change of control 

  

	(a)	For the purposes of this Clause: 

 a change of control
occurs if any person or group of persons acting in concert gains direct or indirect control of the Company; 
 acting in concert
has the meaning given to it in the City Code on Takeovers and Mergers; and 
 control has the meaning given to it in section 416 of
the Income and Corporation Taxes Act 1988. 
  

	(b)	The Company must promptly notify the Agent if it becomes aware of any change of control. 

  

	(c)	Within 30 days after the earlier of notification by the Company to the Agent, or the Agent to the Banks, of a change of control, all of the Commitments shall be automatically
cancelled and all of the Loans together with accrued interest and all other amounts accrued under the Finance Documents, shall become immediately due and payable. 

 Any such notice will take effect in accordance with its terms. 
  

	7.7	Mandatory prepayment-proceeds of new Group indebtedness 

  

	(a)	To the extent Excess UK Borrowings are incurred by UK Subsidiaries under (and as defined in) Clause 16.12 (Restriction on Borrowings of UK Subsidiaries): 

 

	 	(i)	the Company shall notify the Agent promptly after incurrence of Excess UK Borrowings; 

  

	 	(ii)	the Company shall promptly following the incurrence by the relevant UK Subsidiary of any relevant Excess UK Borrowings, repay or prepay an amount equal to 100 per cent. of
those proceeds (less any fees, costs and expenses relating to the Excess UK Borrowings) in repayment or prepayment of the Loans; and 

  

	 	(iii)	the Total Commitments shall be cancelled by an amount equal to 100 per cent. of the proceeds referred to in paragraph (i) above. 

  

	(b)	To the extent Excess US Borrowings are incurred by US Subsidiaries (other than Pacificorp) under (and as defined in) Clause 16.13(b) (Restrictions on Borrowings of US Subsidiaries):

  

	 	(i)	the Company shall notify the Agent promptly after receipt of any proceeds of Excess US Borrowings; 

  

	 	(ii)	the Company shall promptly following receipt by the relevant US Subsidiary of any proceeds from the relevant Excess US Borrowings, repay or prepay an amount equal to 100 per
cent. of those proceeds (less any fees, costs and expenses relating to the Excess US Borrowings) in repayment or prepayment of the Loans; and 

  

	 	(iii)	the Total Commitments shall be cancelled by an amount equal to 100 per cent. of the proceeds referred to in paragraph (i) above. 

  

	8.	INTEREST 

  

	8.1	Interest rate 

 Subject to Clause 8.5 (Default
interest), the rate of interest on each Loan for its Term is the rate per annum determined by the Agent to be the aggregate of the applicable: 
  

	 	(a)	Margin; 

  

					
		 	18	 	22 December 2005

	 	(b)	IBOR; and 

  

	 	(c)	Mandatory Cost. 

  

	8.2	Margin adjustment 

 Any reduction or increase in the
Margin during the Term of a Loan shall be determined on the Business Day immediately following receipt by the Agent of a notice referred to in Clause 16.16 (Rating change) from the Company (or any equivalent notice from a Finance Party) and shall
take effect from the date on which the relevant change in, or withdrawal of, the long term credit rating assigned to the Company by S&P, Moody’s or any other rating agency approved for this purpose by the Majority Banks (as the case may be)
was first published. 
  

	8.3	Non-Business Days 

 If a Term would otherwise end on
a day which is not a Business Day, that Term shall instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not). 
  

	8.4	Due dates 

 Except as otherwise provided in this
Agreement, accrued interest on each Loan is payable by the Company on the last day of its Term and also, if the Term is longer than six months, on the dates falling at six monthly intervals after the first day of that Term. 
  

	8.5	Default interest 

  

	(a)	If the Company fails to pay any amount payable by it under the Finance Documents, it shall forthwith on demand by the Agent pay interest on the overdue amount from the due date up
to the date of actual payment, both before, on and after judgment, at a rate (the default rate) determined by the Agent to be one per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of
non-payment, constituted a Loan in the currency of the overdue amount for such successive Terms of such duration as the Agent may determine (each a Designated Term), that default rate applying to those overdue amounts instead of the rate
under Clause 8.1 (Interest rate). 

  

	(b)	The default rate will be determined on each Business Day or the first day of the relevant Designated Term, as appropriate. 

  

	(c)	If the Agent is informed that deposits in the currency of the overdue amount are not at the relevant time being made available by the Reference Banks to leading banks in the London
interbank market, the default rate will be determined by reference to the cost of funds to the Agent from whatever sources it reasonably selects, after consultation with the Reference Banks. 

  

	(d)	Default interest will be compounded at the end of each Designated Term. 

  

	8.6	Notification of rates of interest 

 The Agent shall
promptly notify each relevant Party of the determination of a rate of interest under this Agreement. 
  

					
		 	19	 	22 December 2005

	8.7	Terms 

  

	(a)	Each Loan has one Term only which will commence on its Utilisation Date. 

  

	(b)	The Company will select the Term for a Loan in the relevant Request. If the Company does not deliver a notice, the Term will be three months. 

  

	(c)	Subject to the following provisions of this Clause, each Term for a Loan will be one, two, three or six months or such other periods as the Company and the Agent (acting on the
instructions of all the Lenders) may agree. 

  

	(d)	If a Term would otherwise overrun the Final Maturity Date it shall be shortened so that it ends on the Final Maturity Date. 

  

	9.	OPTIONAL CURRENCIES 

  

	9.1	Selection 

  

	(a)	The Company shall select the currency of a Loan in the relevant Request. 

  

	(b)	The currency of each Loan must be Sterling or an Optional Currency. 

  

	(c)	The Company may not choose a currency if as a result the Loans would be denominated at any time in more than three currencies. 

  

	(d)	The Agent shall notify each Bank of the currency and the Original Sterling Amount of each Loan and the applicable Agent’s Spot Rate of Exchange promptly after they are
ascertained. 

  

	9.2	Revocation of currency 

 If, before 9.30 a.m. on any
Rate Fixing Day, the Agent receives notice from a Bank that: 
  

	 	(a)	it is impracticable for the Bank to fund its participation in the relevant Loan in the relevant Optional Currency during its Term in the ordinary course of business in the London
interbank market; and/or 

  

	 	(b)	the use of the proposed Optional Currency might contravene any law or regulation, 

 the Agent shall give notice to the Company and to the Banks to that effect before 11.00 a.m. on that day. In this event: 
  

	 	(i)	the Company and the Banks may agree that the drawdown will not be made; or 

  

	 	(ii)	in the absence of agreement, that Bank’s participation in the Loan (or, if more than one Bank is similarly affected, those Banks’ participations in the Loan) shall be
treated as a separate Loan denominated in Sterling during the relevant Term. 

  

	9.3	Optional Currency equivalents 

 The equivalent in
Sterling of a Loan or part of a Loan in an Optional Currency for the purposes of calculating: 
  

	 	(a)	whether any limit under this Agreement has been exceeded; 

  

	 	(b)	the amount of a Loan; 

  

					
		 	20	 	22 December 2005

	 	(c)	the share of a Bank in a Loan; 

  

	 	(d)	the amount of any repayment of a Loan; or 

  

	 	(e)	the undrawn amount of a Bank’s Commitment, 

 is its
Original Sterling Amount. 
  

	9.4	Notification of rates and amounts 

 The Agent shall
promptly notify each Party of any applicable Agent’s Spot Rate of Exchange or Original Sterling Amount. 
  

	10.	PAYMENTS 

  

	10.1	Place 

 All payments by the Company or a Bank under
the Finance Documents shall be made to the Agent to its account at such office or bank as it may notify to the Company or that Bank for this purpose. 
  

	10.2	Funds 

 Payments under the Finance Documents to the
Agent shall be made for value on the due date at such times and in such funds as the Agent may specify to the Party concerned as being customary at the time for the settlement of transactions in the relevant currency in the place for payment.

  

	10.3	Distribution 

  

	(a)	Each payment received by the Agent under this Agreement for another Party shall, subject to paragraphs (b) and (c) below, be made available by the Agent to that Party by
payment (on the date and in the currency and funds of receipt) to its account with such office or bank: 

  

	 	(i)	in the principal financial centre of the relevant currency; or 

  

	 	(ii)	in the case of euro units or national currency units, in the principal financial centre of a Participating Member State or London, 

 as it may notify to the Agent for this purpose by not less than five Business Days’ prior notice. 
  

	(b)	The Agent may apply any amount received by it for the Company in or towards payment (on the date and in the currency and funds of receipt) of any amount due from the Company under
the Finance Documents. 

  

	(c)	Where a sum is to be paid under the Finance Documents to the Agent for the account of another Party, the Agent is not obliged to pay that sum to that Party until it has established
that it has actually received that sum. The Agent may, however, assume that the sum has been paid to it in accordance with this Agreement and, in reliance on that assumption, make available to that Party a corresponding amount. If the sum has not
been made available but the Agent has paid a corresponding amount to another Party, that Party shall forthwith on demand refund the corresponding amount to the Agent together with interest on that amount from the date of payment to the date of
refund, calculated at a rate determined by the Agent to reflect its cost of funds. 

  

					
		 	21	 	22 December 2005

	10.4	Currency 

  

	(a)	A repayment or prepayment of a Loan or any part of a Loan is payable in the currency in which the Loan is denominated on its due date. 

  

	(b)	Interest is payable in the currency in which the relevant amount in respect of which it is payable is denominated. 

  

	(c)	Amounts payable in respect of costs, expenses, taxes and the like are payable in the currency in which they are incurred. 

  

	(d)	Any other amount payable under the Finance Documents is, except as otherwise provided in this Agreement, payable in Sterling. 

  

	10.5	Set-off and counterclaim 

 All payments made by the
Company under the Finance Documents shall be made without set-off or counterclaim. 
  

	10.6	Non-Business Days 

  

	(a)	If a payment under the Finance Documents is due on a day which is not a Business Day, the due date for that payment shall instead be the next Business Day in the same calendar month
(if there is one) or the preceding Business Day (if there is not). 

  

	(b)	During any extension of the due date for payment of any principal under this Agreement interest is payable on the principal at the rate payable on the original due date.

  

	10.7	Partial payments 

  

	(a)	If the Agent receives a payment insufficient to discharge all the amounts then due and payable by the Company under the Finance Documents, the Agent shall apply that payment towards
the obligations of the Company under the Finance Documents in the following order: 

  

	 	(i)	first, in or towards payment of any unpaid costs and expenses of the Agent under the Finance Documents; 

  

	 	(ii)	secondly, in or towards payment pro rata of any accrued interest or fees due but unpaid under this Agreement; 

  

	 	(iii)	thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and 

  

	 	(iv)	fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents. 

  

	(b)	The Agent shall, if so directed by all the Banks, vary the order set out in subparagraphs (a)(ii) to (iv) above. 

  

	(c)	Paragraphs (a) and (b) above shall override any appropriation made by the Company. 

  

	10.8	Netting of payments 

  

	(a)	If on any date an amount (the first amount) is to be advanced or paid by a Bank under this Agreement and an amount (the second amount) is due from the Company to that
Bank under the Finance Documents, the Company instructs that Bank to apply the first amount in or towards payment of the second amount. 

  

					
		 	22	 	22 December 2005

	(b)	The relevant Bank shall remain obliged to advance any excess (or, as the case may be, the Company shall remain obliged to pay any shortfall) in accordance with this Clause 10.
Nothing in this Clause 10.8 shall be effective to create a charge. 

  

	11.	TAXES 

  

	11.1	Gross-up 

 All payments by the Company under the
Finance Documents shall be made free and clear of and without deduction for or on account of any taxes levied or imposed by or on behalf of the UK or any taxing authority thereof or therein except to the extent that the Company is required by law to
make payment subject to any taxes. If any tax or amounts in respect of tax must be deducted from any amounts payable or paid by the Company, or paid or payable by the Agent to a Bank, under the Finance Documents, the Company shall pay such
additional amounts as may be necessary to ensure that the relevant Bank receives a net amount equal to the full amount which it would have received had payment not been made subject to tax. 
  

	11.2	Tax receipts 

 All taxes required by law to be
deducted or withheld by the Company from any amounts paid or payable under the Finance Documents shall be paid by the Company when due and the Company shall, within 30 days of the payment being made, deliver to the Agent for the relevant Bank an
original or certified copy of an official receipt or such other evidence, if any, as is then customary, evidencing that such deduction or withholding has been made and has been accounted for to the appropriate authorities. 
  

	11.3	Qualifying Banks 

  

	(a)	If, otherwise than as a result of the introduction of, change in, or change in the interpretation, administration or application of, any law, treaty or regulation or any practice or
concession of the UK Inland Revenue occurring after the date of this Agreement, a Bank is not or has ceased to be a Qualifying Bank or is not or has ceased to be beneficially entitled to all interest received by it in respect of advances made by it
under this Agreement, the Company will not be liable to pay to or for the account of that Bank under Clause 11.1 (Gross-up) any amount in respect of taxes levied or imposed by the UK or any taxing authority of or in the UK in excess of the amount it
would have been obliged to pay if that Bank had been, or had not ceased to be a Qualifying Bank and had been beneficially entitled to all interest received by it in respect of advances made by it under this Agreement. 

  

	(b)	Each Bank warrants and represents to the Company on the date of this Agreement or (if later) on the date on which it becomes a Party that it is a Qualifying Bank and is beneficially
entitled to all interest receivable by it in respect of advances made by it under this Agreement. 

  

	(c)	Each Bank which ceases to be a Qualifying Bank or which ceases to be beneficially entitled to interest received by it in respect of advances made by it under this Agreement will
notify the Company forthwith upon becoming aware that it has so ceased. 

  

	11.4	Tax Credit 

  

	(a)	If the Company makes a payment pursuant to Clause 11.1 (Gross-up) for the account of any Bank and that Bank has received or been granted and utilised on an affiliated group basis a
credit against, 

  

					
		 	23	 	22 December 2005

 or relief or remission or repayment of, any tax paid or payable by it (a Tax Credit) which is
attributable to that payment or the corresponding payment under the Finance Document that Bank shall, to the extent that it can do so without prejudice to the retention of the amount of such credit, relief, remission or repayment, pay to the Company
such amount as the Bank shall have reasonably determined to be attributable to such payments and which will leave the Bank (after such payment) in no better or worse position than it would have been if the Company had not been required to make any
deduction or withholding. 
  

	(b)	Nothing in this Clause 11.4 shall interfere with the right of a Bank to arrange its tax affairs in whatever manner it thinks fit and without limiting the foregoing no Bank shall be
under any obligation, except as expressly stated in subclause (a) above, to claim a Tax Credit or to claim a Tax Credit in priority to any other claims, relief, credit or deduction available to it. No Bank shall be obliged to disclose any
information relating to its tax affairs or any computations in respect thereof. 

  

	11.5	Tax indemnity 

 In this Clause 11.5, Protected
Party means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of tax in relation to a sum received or receivable (or any sum deemed for the purposes of tax to be received or
receivable) under a Finance Document: 
  

	 	(a)	The Company shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines
will be or has been (directly or indirectly) suffered for or on account of tax by that Protected Party in respect of a Finance Document. 

  

	 	(b)	Paragraph (a) above shall not apply: 

  

	 	(i)	with respect to any tax assessed on a Finance Party: 

  

	 	(A)	under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as
resident for tax purposes; or 

  

	 	(B)	under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

 if that tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be
received or receivable) by that Finance Party; or 
  

	 	(ii)	to the extent a loss, liability or cost: 

  

	 	(A)	is compensated for by an increased payment under Clause 11.1 (Gross-up) or 

  

	 	(B)	would have been compensated for by an increased payment under Clause 11.1 (Gross-up) but was not so compensated solely because one of the exclusions in Clause 11.3(a)
(Qualifying Banks) applied. 

  

	 	(c)	A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim,
following which the Agent shall notify the Company. 

  

					
		 	24	 	22 December 2005

	 	(d)	A Protected Party shall, on receiving a payment from a Company under this Clause 11.5, notify the Agent. 

  

	12.	MARKET DISRUPTION 

  

	12.1	Market disturbance 

  

	(a)	If IBOR is to be determined by reference to the Reference Banks and a Reference Bank does not supply an offered rate by 11.30 a.m. on the applicable Rate Fixing Day, the applicable
IBOR shall, subject to paragraph (b) below, be determined on the basis of the quotations of the remaining Reference Banks. 

  

	(b)	If, in relation to any proposed Loan: 

  

	 	(i)	IBOR is to be determined by reference to the Reference Banks and no, or only one, Reference Bank supplies a rate by 11.30 a.m. on the applicable Rate Fixing Day for the purposes of
determining the applicable IBOR; or 

  

	 	(ii)	the Agent otherwise determines (which determination, made by the Agent acting reasonably, shall be conclusive and binding on all parties) that adequate and fair means do not exist
for ascertaining the applicable IBOR, 

 the Agent shall promptly notify the Company and the relevant Banks of the fact and that
this Clause 12 is in operation. 
  

	12.2	Alternative rates 

 If the Agent gives a notice
under Clause 12.1 (Market disturbance): 
  

	 	(a)	the Company and the Banks may (through the Agent) agree that in the case of a Loan which has not been borrowed, that Loan shall not be borrowed; or 

  

	 	(b)	in the absence of agreement, a Loan (if it has not been borrowed) shall still be made: 

  

	 	(i)	the Term of the Loans concerned shall be one month; and 

  

	 	(ii)	during the Term of each Loan the rate of interest applicable to that Loan shall be the applicable Margin plus the Mandatory Cost plus the rate per annum which is expressed as a
percentage rate per annum of the cost to the Bank concerned of funding that Loan from whatever sources it may reasonably select, which rate shall be notified by the Bank concerned to the Agent before that last date of such Term.

  

	13.	INCREASED COSTS 

  

	13.1	Increased costs 

  

	(a)	Subject to Clause 13.2 (Exceptions), the Company shall forthwith on demand by a Finance Party or any of its Affiliates pay that Finance Party the amount of any increased cost
incurred by it as a result of: 

  

	 	(i)	the introduction of, or any change in, or any change in the interpretation or application of, any law or regulation (including any relating to taxation or reserve asset, special
deposit, cash ratio, liquidity or capital adequacy requirements or any other form of banking or monetary control); or 

  

					
		 	25	 	22 December 2005

	 	(ii)	compliance with any law or regulation made after the date of this Agreement. 

  

	(b)	In this Agreement increased cost means: 

  

	 	(i)	an additional cost incurred by a Finance Party or any of its Affiliates as a result of it having entered into, or performing, maintaining or funding its obligations under, this
Agreement; or 

  

	 	(ii)	that portion of an additional cost incurred by a Finance Party or any of its Affiliates in making, funding or maintaining all or any advances comprised in a class of advances formed
by or including the participations in the Loans made or to be made under this Agreement as is attributable to it making, funding or maintaining those participations; or 

  

	 	(iii)	a reduction in any amount payable to a Finance Party or any of its Affiliates or the effective return to a Finance Party or any of its Affiliates under this Agreement or on its
capital; or 

  

	 	(iv)	the amount of any payment made by a Finance Party or any of its Affiliates, or the amount of interest or other return foregone by a Finance Party or any of its Affiliates,
calculated by reference to any amount received or receivable by a Finance Party or any of its Affiliates from any other Party under this Agreement. 

  

	13.2	Exceptions 

 Clause 13.1 (Increased costs) does not
apply to any increased cost: 
  

	 	(a)	compensated for by the payment of the Mandatory Cost; 

  

	 	(b)	attributable to any tax or amounts in respect of tax which must be deducted from any amounts payable or paid by the Company or payable or paid by the Agent to a Finance Party or any
of its Affiliates under the Finance Documents; 

  

	 	(c)	attributable to any change in the rate of tax on the overall net income, profits or gains of a Bank (or the overall net income, profits or gains of a division or branch of the Bank)
imposed in the jurisdiction in which its principal office or Facility Office is situate. 

  

	14.	ILLEGALITY AND MITIGATION 

  

	14.1	Illegality 

 If it is or becomes unlawful in any
jurisdiction for a Bank to give effect to any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan, then: 
  

					
	(a)	  	the Bank may notify the Company through the Agent accordingly; and
			
	(b)	  	(i)	  	the Company shall to the extent required and within the period allowed by law or regulation or, if no period is allowed by law or regulation, forthwith prepay that Bank’s participation in
all the Loans together with all other amounts payable by it to that Bank under this Agreement; and
			
		  	(ii)	  	the Bank’s Commitment shall be cancelled.

  

	14.2	Mitigation 

 Notwithstanding the provisions of
Clauses 11 (Taxes), 13.1 (Increased costs) and 14.1 (Illegality), if in relation to a Bank or (as the case may be) the Agent circumstances arise which would result in: 
  

	 	(a)	any deduction, withholding or payment of the nature referred to in Clause 11 (Taxes); or 

  

					
		 	26	 	22 December 2005

	 	(b)	any increased cost of the nature referred to in Clause 13.1 (Increased costs); or 

  

	 	(c)	a notification pursuant to 14.1 (Illegality), 

 then
without in any way limiting, reducing or otherwise qualifying the rights of that Bank or the Agent, that Bank shall upon becoming aware of the same notify the Agent thereof (whereupon the Agent shall notify the Company) and such Bank shall use
reasonable endeavours to transfer its participation in the Facility and, in the case of the Agent or that Bank, its rights hereunder and under the Finance Documents to another financial institution or Facility Office not affected by the
circumstances having the results set out in (a), (b) or (c) above and shall otherwise take such reasonable steps as may be open to it to mitigate the effects of such circumstances provided that such Bank or the Agent (as the case may be)
shall not be under any obligation to take any such action if, in its reasonable opinion, to do so might have a material adverse effect upon its business, operations or financial condition or might involve it in any unlawful activity or any activity
that is contrary to any request, guidance or directive of any competent authority (whether or not having the force of law) or (unless indemnified to its satisfaction) might involve it in any expense or tax disadvantage. 
  

	15.	REPRESENTATIONS AND WARRANTIES 

  

	15.1	Representations and warranties 

 The Company (in
respect of itself and the Group) makes the representations and warranties set out in this Clause 15 (Representations and Warranties) to each Finance Party. 
  

	15.2	Status 

  

	(a)	It is a limited liability company, duly incorporated and validly existing under the laws of the jurisdiction of its incorporation; and 

  

	(b)	each member of the Group has the power to own its assets and carry on its business as it is being conducted. 

  

	15.3	Powers and authority 

 It has the power to enter
into and perform, and has taken all necessary action to authorise the entry into, performance and delivery of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents. 
  

	15.4	Legal validity 

 Each Finance Document to which it
is or will be a party constitutes, or when executed in accordance with its terms will constitute, its legal, valid and binding obligation, enforceable (subject to the Reservations) in accordance with its terms. 
  

	15.5	Non-conflict 

 The entry into and performance by it
of, and the transactions contemplated by, the Finance Documents do not and will not conflict with: 
  

	 	(a)	any law or regulation or judicial or official order; or 

  

	 	(b)	the constitutional documents of any member of the Group; or 

  

					
		 	27	 	22 December 2005

	 	(c)	to the best of the knowledge, information and belief of its Directors, any document including any Licence which is binding upon any member of the Group or any asset of any member of
the Group, to an extent or in a manner which would have a material adverse effect on its ability to perform its obligations under this Agreement. 

  

	15.6	No default 

  

	(a)	No Default is outstanding or would result from the making of any Loan; and 

  

	(b)	no other event is outstanding which constitutes (or, with the giving of notice, lapse of time, determination of materiality or the fulfilment of any other applicable condition or
any combination of the foregoing, is reasonably likely to constitute) a default under any document which is binding on any member of the Group or any asset of any member of the Group to an extent or in a manner which might have a material adverse
effect on its ability to perform its obligations under the Finance Documents. 

  

	15.7	Authorisations and admissibility in evidence 

 All
authorisations required: 
  

	 	(a)	in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, the Finance Documents; and 

  

	 	(b)	to make the Finance Documents admissible in evidence in England and Wales, 

 have been obtained or effected (as appropriate) and are in full force and effect. 
  

	15.8	Licences 

 Each member of the Group which requires a
Licence for the conduct of its business has been duly licensed. 
  

	15.9	Accounts 

 The audited consolidated accounts of the
Group most recently delivered to the Agent (which in respect of the Company only, at the date of this Agreement, are the Original Group Accounts): 
  

	 	(a)	have been prepared in accordance with accounting principles and practices generally accepted in the United Kingdom consistently applied; and 

  

	 	(b)	fairly represent the consolidated financial condition of the Group as at the date to which they were drawn up. 

  

	15.10	Litigation 

 Save as disclosed in writing to the
Agent prior to the date of this Agreement, no litigation, arbitration or administrative proceedings in relation to any member of the Group are current or, to its knowledge, pending or threatened, which are reasonably expected to be adversely
determined and which would, if adversely determined, be likely to have a material adverse effect on the ability of the Company to perform its obligations under this Agreement. 
  

	15.11	Information 

  

	(a)	All of the factual information supplied by it to the Agent in connection with the Finance Documents is true in all material respects and not misleading in any respect and there are
no facts or matters not disclosed in writing to the Agent the omission of which makes any such factual information incorrect or misleading in any respect. 

  

					
		 	28	 	22 December 2005

	(b)	Nothing has occurred since the date the information was provided which renders the information contained in it untrue or misleading in any material respect and which, if disclosed,
may affect the decision of a person considering whether to enter into this Agreement. 

  

	15.12	Pari passu ranking 

 Its payment obligations under
the Finance Documents rank at least pari passu with all its other present and future unsecured payment obligations, except for obligations mandatorily preferred by law applying to companies generally. 
  

	15.13	No material adverse change 

 As at the date of this
Agreement, there has been no material adverse change in the consolidated financial condition of the Group since the date to which the Original Group Accounts were drawn up. 
  

	15.14	Deduction of Tax 

  

	(a)	It is not overdue in the filing of any tax returns or filings relating to any material amount of tax and it is not overdue in the payment of any material amount of, or in respect
of, tax. 

  

	(b)	No claims or investigations by any tax authority are being or are reasonably likely to be made or conducted against it which are reasonably likely to result in a liability of or
claim against any member of the Group to pay any material amount of, or in respect of, tax. 

  

	(c)	For tax purposes, it is resident only in the jurisdiction of its incorporation. 

  

	(d)	All amounts payable by it under the Finance Documents may be made without any deduction for or on account of tax. 

  

	15.15	Labour-related liabilities 

  

	(a)	No claims or investigations by any relevant authority are being or are reasonably likely to be made or conducted against it which are reasonably likely to result in a liability of
or claim against any member of the Group to pay any material amount of, or in respect of, pensions, ERISA or similar labour-related liabilities. 

  

	(b)	Each relevant member of the Group has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in
compliance in all material respects with the presently applicable provisions of ERISA and the Internal Revenue Code with respect to each Plan. Where applicable, no member of the Group has (i) failed to make any contribution or payment to any
Plan or Multiemployer Plan (as the case may be), or made any amendment to any Plan, which has resulted or would result in the imposition of a Security Interest or the posting of a bond or other security under ERISA or the Internal Revenue Code or
(ii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA, except where such failure or incurrence would not have a material adverse effect on the ability of the Company
to perform its obligations under this Agreement. 

 For the purposes of this Clause: 
 ERISA means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute. 
  

					
		 	29	 	22 December 2005

 Internal Revenue Code means the Internal Revenue Code of 1986, as amended, or any successor
statute. 
 Multiemployer Plan means at any time an employee pension benefit plan within the meaning of Section 4001(a)(3) of
ERISA to which any member of the Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any company which ceased to be a member of the Group
during such five year period. 
 PBGC means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its
functions under ERISA. 
 Plan means at any time an employee pension benefit plan (other than a Multiemployer Plan) which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or contributed to, by any relevant member of the Group for employees of any relevant member of the
Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any company which was at such time a member of the Group for employees of any company which was at such time a member of the Group. 

 

	15.16	Winding up, insolvency etc. 

 No meeting has been
convened for the winding-up, administration, dissolution or liquidation of the Company, no such step is intended by the Company and, so far as the Company is aware, no petition, application or equivalent or analogous procedure under the law of the
jurisdiction of its incorporation is outstanding for the winding-up, administration, dissolution or liquidation of the Company. 
  

	15.17	Environment 

  

	(a)	It has obtained all Environmental Licences required for the carrying on of its business as currently conducted and has at all times complied with: 

  

	 	(i)	the terms and conditions of such Environmental Licences; and 

  

	 	(ii)	all other applicable Environmental Laws, 

 where, in each
case, if not obtained or complied with the failure or its consequences would have a material adverse effect on the ability of the Company to perform its obligations under this Agreement. There are to its knowledge no circumstances that may prevent
or interfere with such compliance in the future. 
  

	(b)	There is no Environmental Claim pending or formally threatened and there are no past or present acts, omissions, events or circumstances that would form, or are reasonably likely to
form, the basis of any Environmental Claim (including any arising out of the generation, storage, transport, disposal or release of any dangerous substance) against any member of the Group which, if adversely determined, would have a material
adverse effect on the ability of the Company to perform its obligations under this Agreement. 

  

					
		 	30	 	22 December 2005

	15.18	Times for making representations and warranties 

 The representations and warranties set out in this Clause 15 are made by the Company on the date of this Agreement and, other than Clause 15.11 (Information) and 15.13 (No material adverse change), are deemed to be repeated by the Company
on the date of each Request, the date of each deemed Request made pursuant to Clause 6(d) (Repayment), each Utilisation Date and the first day of each Term, with reference to the facts and circumstances then existing, and in any case on a quarterly
basis following the date of this Agreement. 
  

	16.	UNDERTAKINGS 

  

	16.1	Duration 

 The undertakings in this Clause 16
(Undertakings) will remain in force from the date of this Agreement for so long as any amount is or may be outstanding under this Agreement or any Commitment is in force. 
  

	16.2	Financial information 

  

	(a)	The Company shall supply to the Agent in sufficient copies for all the Banks: 

  

	 	(i)	as soon as the same are available (and in any event within 180 days of the end of each of its financial years) the audited consolidated accounts of the Group for that financial
year; 

  

	 	(ii)	as soon as the same are available (and in any event within 90 days of the end of the first half-year of each of its financial years) the unaudited consolidated accounts of the Group
for that half-year; 

  

	 	(iii)	(in respect of the Company only), together with the accounts specified in: 

  

	 	(A)	paragraph (i) above, a certificate signed by two of its directors on its behalf setting out in reasonable detail computations establishing compliance with Clause 16.11
(Financial covenants) as at the date to which those accounts were drawn up; 

  

	 	(B)	paragraph (ii) above, a certificate signed by two of its directors on its behalf setting out in reasonable detail computations establishing compliance with Clause 16.11
(Financial covenants) as at the date to which those accounts were drawn up; and 

  

					
	(b)	  	     (i)	  	     The Company must notify the Agent of any change to the manner in which its audited consolidated accounts are
prepared.

  

	 	(ii)	If requested by the Agent, the Company must supply to the Agent: 

  

	 	(A)	a full description of any change notified under paragraph 16.2(b)(i) above; and 

  

	 	(B)	sufficient information to enable the Finance Parties to make a proper comparison between the financial position shown by the set of accounts prepared on the changed basis and its
most recent audited consolidated accounts delivered to the Agent under this Agreement. 

  

	 	(iii)	The Company may, or if requested by the Agent the Company must, enter into discussions for a period of not more than 30 days with a view to agreeing any amendments required to be
made to this Agreement to place the Company and the Banks in the same position as they would have been in if the change had not happened. Any agreement between the Company and the Agent will be, with the prior consent of the Majority Banks, binding
on all the Parties. 

  

					
		 	31	 	22 December 2005

	 	(iv)	If no agreement is reached under paragraph (iii) above on the required amendments to this Agreement, the Company must supply with each set of its accounts another set of its
accounts prepared on the same basis as the Company’s published interim consolidated financial statements for the six months period ending on 30 September 2005. 

  

	16.3	Information-Miscellaneous 

 The Company shall supply
to the Agent: 
  

	 	(a)	all documents despatched by it to its shareholders (or any class of them) or its creditors (or any class of them) at the same time as they are despatched; 

 

	 	(b)	promptly upon becoming aware of them, details of any litigation, arbitration or administrative proceedings which are current, threatened or pending, and which might, if adversely
determined, have a material adverse effect on its ability to perform its obligations under the Finance Documents; and 

  

	 	(c)	promptly, such further information in the possession or control of any member of the Group regarding its financial condition, business or operations as any Finance Party through the
Agent may reasonably request, 

 in sufficient copies for all of the Banks, if the Agent so requests. 
  

	16.4	Notification of Default 

 The Company shall notify
the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of it. 
  

	16.5	Compliance certificates 

 The Company shall supply
to the Agent promptly at any time, if the Majority Banks so request and they have or the Agent has grounds for believing that a Default may be outstanding, a statement signed by one of its senior officers on its behalf incorporating such information
as it has in its possession which may be relevant as to whether any Default is outstanding and, if a Default is stated to be outstanding, stating the steps if any being taken to remedy it. Such statements shall contain such certificates as the
Majority Banks may reasonably require as to questions of fact which are within the knowledge of the Company. 
  

	16.6	Authorisations and Licences 

  

	(a)	The Company shall promptly: 

  

	 	(i)	obtain, maintain and comply with the terms of; and 

  

	 	(ii)	if requested, supply certified copies to the Agent of, 

 any authorisation required under any law or regulation to enable it to perform its obligations under, or for the validity or enforceability of, any Finance Document. 
  

	(b)	The Company shall ensure that each member of the Group which requires a Licence for the conduct of its business has been duly licensed. 

  

					
		 	32	 	22 December 2005

	16.7	Pari passu ranking 

 The Company shall procure that
its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured obligations, except for taxes, national insurance contributions, employee remuneration and benefits and any other
obligations which from time to time are mandatorily preferred by law applying to companies generally. 
  

	16.8	Negative pledge 

  

	(a)	Subject to paragraph (b) below, the Company shall not, and shall procure that no other member of the Group will, create or permit to subsist, any Security Interest on any of
its assets. 

  

	(b)	Notwithstanding paragraph (a) above, each member of the Group may create, or permit to subsist, Permitted Security Interests on its assets. 

  

	16.9	Disposals 

  

	(a)	The Company shall not, and shall procure that any member of the Group shall not, either in a single transaction or in a series of transactions, whether related or not and whether
voluntarily or involuntarily sell, transfer, grant or lease or otherwise dispose of: 

  

	 	(i)	any Licence or its interest in any Mandatory Subsidiary or any other Subsidiary to whom a Mandatory Subsidiary sells, transfers, grants, leases or otherwise disposes of any Licence;
or 

  

	 	(ii)	any material part of its assets (to the extent not prohibited by subparagraph (i) above). 

  

	(b)	Paragraph (a) does not apply to the Disposal. 

  

	(c)	Subparagraph (a)(ii) does not apply to: 

  

	 	(i)	disposals made in the ordinary course of business of the disposing entity; 

  

	 	(ii)	disposals of assets in exchange for other assets comparable or superior as to type, value and quality; 

  

	 	(iii)	the disposal of assets on arm’s length terms; 

  

	 	(iv)	sale and lease-back transactions the net financial effect of each of which (looking at the sale and any related lease-back together) represent a transaction on arm’s length
terms; and 

  

	 	(v)	disposals to which the Majority Banks have agreed in writing. 

  

	16.10	Environmental matters 

 The Company will procure
that each member of the Group complies in all material respects with: 
  

	 	(a)	the terms and conditions of all Environmental Licences applicable to it; and 

  

	 	(b)	all other applicable Environmental Law, 

 where failure to
comply with the relevant Environmental Licence or Environmental Law might reasonably be expected to have a material adverse effect on the Company’s ability to perform its obligations under this Agreement. 
  

					
		 	33	 	22 December 2005

	16.11	Financial covenants 

  

	(a)	The Company shall procure that the ratio of Total Consolidated Net Borrowings to Consolidated Operating Cash Flows Before Movements in Working Capital does not at any time exceed
4.25 to 1 to be measured on a semi annual basis in respect of the preceding twelve month period and, in relation to the first measurement, to be measured by reference to the Company’s published interim consolidated financial statements for the
six months period ending on 30 September 2005. 

  

	(b)	Terms used in the definitions of Borrowings, Consolidated Operating Cash Flows Before Movements in Working Capital, Interest Payable, Interest Receivable, Net Interest Payable,
Tangible Consolidated Net Worth, Total Consolidated Borrowings and Total Consolidated Net Borrowings in Clause 1.1 (Definitions) are to be construed, and calculated, in accordance with the accounting principles applied in connection with the
Company’s published interim consolidated financial statements for the six months period ending 30 September 2005. 

  

	(c)	If there is a dispute as to any interpretation or computation for subparagraph (b) above, the interpretation or computation of the auditors for the time being of the Company
will prevail. 

  

	16.12	Restriction on Borrowings of UK Subsidiaries 

 The
Company shall procure that no UK Subsidiaries will have outstanding any Borrowings, except for: 
  

	 	(a)	any Borrowing listed in Schedule 8 (Existing Borrowings); 

  

	 	(b)	Borrowings incurred by UK Subsidiaries with the prior consent of the Majority Banks; 

  

	 	(c)	Borrowings owed by UK Subsidiaries to any member of the Group; 

  

	 	(d)	Borrowings of UK Subsidiaries not exceeding £500,000,000 in aggregate in connection with a securitisation or transaction of a similar effect after the date of this Agreement
in respect of the assets of that UK Subsidiary, subject to the repayment or prepayment obligation in paragraph (f) below; 

  

	 	(e)	any Borrowings by a UK Subsidiary which is a directly wholly-owned special purpose Project Finance Subsidiary of the Company and not exceeding £500,000,000 (or its equivalent
in other currencies); 

  

	 	(f)	any other Borrowings of any UK Subsidiary so long as, if the Borrowings by UK Subsidiaries under this paragraph (f) and under paragraph (d) above (which are not a
refinancing of any existing Borrowings by a UK Subsidiary in the same or lesser amount) exceed £200,000,000 (or its equivalent in other currencies) in aggregate, the excess amount of such Borrowings (the Excess UK Borrowings) are used
to repay or prepay the Loans in accordance with Clause 7.7 (Mandatory prepayment-proceeds of new Group indebtedness). 

 In this
Clause 16.12: 
  

	 	(A)	Borrowings of a Subsidiary of the Company arising in respect of guarantees issued by it, at any time, shall be taken into account in an amount equal to the actual (and not the
nominal) amount guaranteed by that guarantee at that time; and 

  

	 	(B)	Borrowings of Subsidiaries of the Company party to an intra-Group bank netting arrangement in relation to the usual operation of current accounts, at any time, shall be taken into
account only in an amount equal to the net debit balance outstanding in respect of all accounts subject to that netting arrangement, at that time. 

  

					
		 	34	 	22 December 2005

	16.13	Restrictions on Borrowings of US Subsidiaries 

  

	(a)	Until the Disposal Effective Date, the Company shall procure that PacifiCorp Total Debt will at no time exceed 60 per cent. of PacifiCorp Total Capitalisation.

  

	(b)	The Company shall procure that US Subsidiaries (excluding Pacificorp) will at no time have outstanding Borrowings (other than Project Finance Borrowings) exceeding US$500,000,000
(or its equivalent in other currencies) in aggregate unless the excess amount of such Borrowings (the Excess US Borrowings) are used to repay or prepay the Loans in accordance with Clause 7.7 (Mandatory prepayment-proceeds of new Group
indebtedness). 

  

	(c)	For the purposes of this Clause: 

 Consolidated
Subsidiary means at any date any Subsidiary or other entity the accounts of which would be consolidated with those of Pacificorp in its consolidated financial statements if such statements were prepared as of such date. 
 PacifiCorp Total Capitalisation means at any date, without duplication and after intercompany eliminations among Pacificorp and its Consolidated
Subsidiaries, the sum of: 
  

	 	(a)	all Borrowings of PacifiCorp and its Consolidated Subsidiaries; 

  

	 	(b)	preferred stock of PacifiCorp; and 

  

	 	(c)	common stock equity of PacifiCorp, 

 all determined as of
such date; provided that Qualifying Junior Subordinated Debt shall be included in PacifiCorp Total Capitalisation only if and to the extent that the inclusion thereof does not cause the aggregate amount of all preferred stock and Qualifying Junior
Subordinated Debt to exceed 15 per cent. of PacifiCorp Total Capitalisation. 
 PacifiCorp Total Debt means at any date, without
duplication and after intercompany eliminations among Pacificorp and its Consolidated Subsidiaries, the sum of: 
  

	 	(a)	all Borrowings of PacifiCorp and its Consolidated Subsidiaries (other than Qualifying Junior Subordinated Debt); and 

  

	 	(b)	any portion of mandatorily redeemable preferred stock of PacifiCorp or any of its Consolidated Subsidiaries that is a current liability, 

 all determined as of such date. 
 Qualifying Junior Subordinated Debt means subordinated debt of PacifiCorp which has: 
  

	 	(a)	an original maturity of 20 years or more; 

  

	 	(b)	provisions permitting PacifiCorp to defer the payment of interest for a period or periods of 20 consecutive quarters or more; 

  

	 	(c)	no principal payments that are due and payable until after the Final Maturity Date; and 

  

					
		 	35	 	22 December 2005

	 	(d)	all other characteristics (except interest rate) materially no less favorable to PacifiCorp than PacifiCorp’s 8 1/4 per cent. Junior Subordinated Deferrable Interest Debentures, Series C maturing on 30 June 2036 and described in PacifiCorp Capital I’s
Prospectus Supplement dated 6 June 1996. 

  

	16.14	Lending and guarantees 

  

	(a)	Except as provided in paragraph (b) below, no member of the Group may be the creditor in respect of any Borrowings or of any trade credit extended to any of its customers.

  

	(b)	Paragraph (a) does not apply to: 

  

	 	(i)	trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities; 

  

	 	(ii)	any loan by one member of the Group to another member of the Group; or 

  

	 	(iii)	any other exceptions agreed by the Majority Banks. 

  

	16.15	Change of business 

 The Company must ensure that no
substantial change is made to the general nature of the business of the Company or the Group from that carried on as at the date of this Agreement. 
  

	16.16	Rating change 

 The Company shall provide to the
Agent, promptly upon becoming aware of it, written notice of any change in (or withdrawal of) the long term credit rating assigned to it by S&P or Moody’s or such other rating agency as may be approved from time to time for this purpose by
the Majority Banks. 
  

	16.17	SP Energy Management 

 The Company shall procure
that SP Energy Management will conduct itself in its business in accordance with the standards of a reasonable and prudent operator. 
 For
the purposes of this Clause, reasonable and prudent operator means a person seeking to perform its contractual obligations and in so doing and in the general conduct of its undertaking exercising that degree of skill, diligence, prudence and
foresight which would reasonably and ordinarily be expected from a skilled and experienced operator in compliance with all applicable laws engaged in the same type of undertaking in the same jurisdictions and under the same or similar circumstances
and conditions. 
  

	16.18	Use of websites 

  

	(a)	Except as provided below, the Company may deliver any information under this Agreement to a Bank by posting it on to an electronic website if: 

  

	 	(i)	the Agent and the Bank agree; 

  

	 	(ii)	the Company and the Agent designate an electronic website for this purpose; 

  

	 	(iii)	the Company notifies the Agent of the address of and password for the website; and 

  

	 	(iv)	the information posted is in a format agreed between the Company and the Agent. 

  

					
		 	36	 	22 December 2005

 The Agent must supply each relevant Bank with the address of and password for the website. 
  

	(b)	Notwithstanding the above, the Company must supply to the Agent in paper form a copy of any information posted on the website together with sufficient copies for:

  

	 	(i)	any Bank not agreeing to receive via the website; and 

  

	 	(ii)	within ten Business Days of request any other Bank, if that Bank so requests. 

  

	(c)	The Company must promptly upon becoming aware of its occurrence, notify the Agent if: 

  

	 	(i)	the website cannot be accessed; 

  

	 	(ii)	the website or any information on the website is infected by an electronic virus or similar software; 

  

	 	(iii)	the password for the website is changed; or 

  

	 	(iv)	any information to be supplied under this Agreement is posted on the website or amended after being posted. 

 If the circumstances in subparagraphs (i) or (ii) above occur, the Company must supply any information required under this Agreement in paper
form until the Agent is satisfied that the circumstances giving rise to the notification are not longer continuing. 
  

	16.19	Know Your Customer Requirements 

  

	(a)	The Company must promptly on the request of any Finance Party supply to that Finance Party any documentation or other evidence which is reasonably requested by that Finance Party
(whether for itself, on behalf of any Finance Party or any prospective new Bank) to enable a Finance Party or prospective new Bank to carry out and be satisfied with the results of all know your customer requirements. 

  

	(b)	Each Bank must promptly on the request of the Agent supply to the Agent any documentation or other evidence which is reasonably required by the Agent to carry out and be satisfied
with the results of all know your customer requirements. 

  

	16.20	Compliance with laws 

 The Company must comply in
all respects with all laws to which it is subject where failure to do so is reasonably likely to have a Material Adverse Effect. 
  

	17.	DEFAULT 

  

	17.1	Events of Default 

 Each of the events set out in
Clauses 17.2 (Non-payment) to 17.18 (Material adverse change) (inclusive) is an Event of Default (whether or not caused by any reason whatsoever outside the control of the Company or any other person). 
  

	17.2	Non-payment 

 The Company does not pay any amount
payable by it under the Finance Documents at the place at and in the currency in which it is expressed to be payable, unless: 
  

	 	(a)	its failure to pay is caused by administrative or technical error; and 

  

					
		 	37	 	22 December 2005

	 	(b)	payment is made within three Business Days of its due date. 

  

	17.3	Breach of other obligations 

 The Company does not
comply with any provision of the Finance Documents (other than those referred to in Clause 17.2 (Non-payment)) and such failure (if capable of remedy before the expiry of such period) continues unremedied for a period of 30 days from the date on
which the Agent gives notice to the Company requiring the same to be remedied. 
  

	17.4	Misrepresentation 

 A representation, warranty or
statement made or repeated by the Company in or in connection with any Finance Document or in any document delivered by or on behalf of the Company under or in connection with any Finance Document is incorrect in any material respect when made or
deemed to be made or repeated. 
  

	17.5	Cross-default 

  

	(a)	Any Borrowings (other than Hedging Liabilities) of a member of the Group are not paid when due after the expiry of any applicable grace period provided in the original documentation
therefor; or 

  

	(b)	any Hedging Liabilities of a member of the Group are not paid within a period of five Business Days of the due date or any applicable grace period provided in the original
documentation therefor, whichever is the shorter; or 

  

	(c)	any Borrowings of a member of the Group become (or become capable of being declared) prematurely due and payable or are placed (or become capable of being placed) on demand in each
case as a result of an event of default or termination event (howsoever described) under the document relating to those Borrowings; or 

  

	(d)	any Security Interest securing Borrowings over any asset of a member of the Group becomes enforceable and the holder thereof shall commence proceedings or appoint a receiver,
manager or similar officer to take steps to enforce the same, 

 except that this Clause 17.5 shall not apply to: 
  

	 	(i)	Project Finance Borrowings; or 

  

	 	(ii)	Borrowings: 

  

	 	(A)	liability for payment of which is being contested in good faith by appropriate proceedings provided that if the Company’s auditors determine that the amount in dispute should
be provided for in the relevant accounts, that the auditors verify that such amount is fully provided against; or 

  

	 	(B)	the aggregate principal amount of which (taking into account, in the case of Hedging Liabilities, the net payment due to the relevant counterparties as the principal amount for this
purpose) is £30,000,000 or less or its equivalent in other currencies. 

  

	17.6	Insolvency 

  

	(a)	The Company or a Principal Subsidiary is, or is deemed for the purposes of any law to be, unable to pay its debts (within the meaning of Section 123(1) or, in the case of the
Company only, 123(2) of 

  

					
		 	38	 	22 December 2005

 the Insolvency Act 1986 but, for the purposes of this Clause 17.6, Section 123(1)(a) of the
Insolvency Act 1986 shall have effect as if for £750 there was substituted £250,000 or such higher figure as the Majority Banks may from time to time agree). 
  

	(b)	The Company or a Principal Subsidiary suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of
its indebtedness. 

  

	(c)	The Company or a Principal Subsidiary by reason of financial difficulties, begins negotiations with one or more of its creditors with a view to the readjustment or rescheduling of
any of its indebtedness. 

  

	(d)	Unless the Agent (acting on the instructions of the Majority Banks) confirms otherwise, if a moratorium occurs in respect of the Company or a Principal Subsidiary, the ending of the
moratorium will not remedy any Event of Default caused by the moratorium. 

  

	17.7	Administration 

  

	(a)	Any meeting of the Company’s or of any Principal Subsidiary’s shareholders, directors or other officers is convened for the purpose of considering any resolution for, to
petition for or to file documents with a court or any registrar for its administration or any such resolution is passed; or 

  

	(b)	the directors, shareholders or other officers of the Company or any Principal Subsidiary request an application for an administrative order, or give notice of their intention to
make such a request; or 

  

	(c)	any person presents an application to, or files documents with, a court or any registrar for an administration order in relation to the Company or any Principal Subsidiary and
either (i) the Company or such Principal Subsidiary (as the case may be) does not apply to the court within 30 days after the presentation of such petition requesting the court to refuse such petition or (ii) it does so apply but such
petition is not refused by such court within 60 days after such application for the refusal of such petition. 

  

	17.8	Compositions etc 

 The Company or any Principal
Subsidiary has any voluntary arrangement proposed in relation to it under Section 1 of the Insolvency Act 1986 or any step is taken with a view to a moratorium, composition, scheme of arrangement, compromise or other arrangement involving the
Company or such Principal Subsidiary (as the case may be) and their respective creditors generally (other than for the purposes of reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by
the Majority Banks). 
  

	17.9	Winding up 

  

	(a)	Any meeting of the Company’s or of any Principal Subsidiary’s shareholders, directors or other officers is convened for the purpose of considering any resolution for (or
to petition for or to file documents with a court or any registrar for) its winding up or dissolution (other than in connection with a reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing
by the Majority Banks); or 

  

	(b)	the Company or any Principal Subsidiary passes any resolution for its winding up or dissolution other than a resolution previously approved in writing by the Majority Banks (other
than in connection with a reconstruction or amalgamation upon terms and within such period as may previously have been approved in writing by the Majority Banks); or 

  

					
		 	39	 	22 December 2005

	(c)	any person presents a petition, or files documents with a court or any registrar for the winding up or dissolution of the Company or any Principal Subsidiary is presented to the
court and either (i) the Company or such Principal Subsidiary (as the case may be) does not apply to the court within 30 days after the presentation of such petition requesting the court to refuse such petition, or (ii) it does so apply
but such petition is not refused by such court within 60 days after such application for the refusal of such petition; or 

  

	(d)	the Company or any Principal Subsidiary becomes subject to a winding up or dissolution order. 

  

	17.10	Appointment of receivers and managers 

  

	(a)	Any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like is appointed in respect of the Company or
any Principal Subsidiary or any material part of its assets or undertaking and (in the case of a receiver only) such appointment continues for more than 30 days; or 

  

	(b)	the directors, shareholders (acting by the requisite majority thereof, if any requisite majority is applicable) or other officers of the Company or any Principal Subsidiary request
the appointment, or give notice of their intention to appoint a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or the like. 

  

	17.11	Creditors’ process 

 Any attachment,
sequestration, distress, execution or diligence (whether on the dependence or otherwise) affects any material asset of the Company or any Principal Subsidiary and is not discharged within 21 days. 
  

	17.12	Analogous proceedings 

 There occurs, in relation to
the Company or any Principal Subsidiary, any event anywhere which corresponds to any of those mentioned in Clauses 17.6 (Insolvency) to 17.11 (Creditors’ process) (inclusive). 
  

	17.13	Unlawfulness 

 It is or becomes unlawful for the
Company to perform any of its obligations under the Finance Documents. 
  

	17.14	Revocation and Modification of Licences 

 Any
Licence is: 
  

	 	(a)	revoked, surrendered, terminated or disposed of (or any notice of revocation or termination is issued by the relevant regulatory authority); or 

  

	 	(b)	modified, 

 in any manner or circumstances which would have
a material adverse effect on the ability of the Company to perform any of its obligations under this Agreement. 
  

	17.15	Cessation of business 

 The Company ceases to carry
on all or a substantial part of its business. 
  

					
		 	40	 	22 December 2005

	17.16	Change of control of a Mandatory Subsidiary 

 A
Mandatory Subsidiary ceases to be a wholly owned Subsidiary of the Company. 
  

	17.17	Repudiation 

 The Company repudiates a Finance
Document or evidences an intention to repudiate a Finance Document. 
  

	17.18	Material adverse change 

 Any event or circumstance
occurs which has a Material Adverse Effect. 
  

	17.19	Acceleration 

 On and at any time after the
occurrence of an Event of Default while such event is continuing the Agent may, and shall if so directed by the Majority Banks, by notice to the Company: 
  

	 	(a)	cancel the Total Commitments; and/or 

  

	 	(b)	demand that all of the Loans, together with accrued interest, and all other amounts accrued under this Agreement be immediately due and payable, whereupon they shall become
immediately due and payable; and/or 

  

	 	(c)	demand that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand. 

  

	18.	THE AGENT AND THE MANDATED LEAD ARRANGERS 

  

	18.1	Appointment and duties of the Agent 

 Each Finance
Party (other than the Agent) irrevocably appoints the Agent to act as its agent under and in connection with the Finance Documents, and irrevocably authorises the Agent on its behalf to perform the duties and to exercise the rights, powers and
discretions that are specifically delegated to it under or in connection with the Finance Documents, together with any other incidental rights, powers and discretions. The Agent shall have only those duties which are expressly specified in this
Agreement. Those duties are solely of a mechanical and administrative nature. 
  

	18.2	Role of the Mandated Lead Arrangers 

 Except as
otherwise provided in this Agreement, each Mandated Lead Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document. 
  

	18.3	Relationship 

 The relationship between the Agent
and the other Finance Parties is that of agent and principal only. Nothing in this Agreement constitutes the Agent as trustee or fiduciary for any other Party or any other person and the Agent need not hold in trust any moneys paid to it for a Party
or be liable to account for interest on those moneys. 
  

	18.4	Majority Banks’ directions 

 The Agent will be
fully protected if it acts in accordance with the instructions of the Majority Banks in connection with the exercise of any right, power or discretion or any matter not expressly provided for in the Finance Documents. Any such instructions given by
the Majority Banks will be binding on all the Banks. In the absence of such instructions the Agent may act as it considers to be in the best interests of all the Banks. 
  

					
		 	41	 	22 December 2005

	18.5	Delegation 

 The Agent may act under the Finance
Documents through its personnel and agents. 
  

	18.6	Responsibility for documentation 

 Neither the Agent
nor a Mandated Lead Arranger is responsible to any other Party for: 
  

	 	(a)	the execution, genuineness, validity, enforceability or sufficiency of any Finance Document or any other document; 

  

	 	(b)	the collectability of amounts payable under any Finance Document; or 

  

	 	(c)	the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document. 

  

	18.7	Default 

  

	(a)	The Agent is not obliged to monitor or enquire as to whether or not a Default has occurred. The Agent will not be deemed to have knowledge of the occurrence of a Default unless, in
the case of the non-payment of any amount due under the Finance Documents, the Agent is aware of such non-payment. However, if the Agent receives notice from a Party referring to this Agreement, describing the Default and stating that the event is a
Default, it shall promptly notify the Banks. 

  

	(b)	The Agent may require the receipt of security satisfactory to it whether by way of payment in advance or otherwise, against any liability or loss which it will or may incur in
taking any proceedings or action arising out of or in connection with any Finance Document before it commences these proceedings or takes that action. 

  

	18.8	Exoneration 

  

	(a)	Without limiting paragraph (b) below, the Agent will not be liable to any other Party for any action taken or not taken by it under or in connection with any Finance Document,
unless directly caused by its gross negligence or wilful misconduct. 

  

	(b)	No Party may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of
any kind (including negligence or wilful misconduct) by that officer, employee or agent in relation to any Finance Document. 

  

	18.9	Reliance 

 The Agent may: 
  

	 	(a)	rely on any notice or document believed by it to be genuine and correct and to have been signed by, or with the authority of, the proper person; 

  

	 	(b)	rely on any statement made by a director or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify;
and 

  

					
		 	42	 	22 December 2005

	 	(c)	engage, pay for and rely on legal or other professional advisers selected by it (including those in the Agent’s employment and those representing a Party other than the Agent).

  

	18.10	Credit approval and appraisal 

 Without affecting
the responsibility of the Company for information supplied by it or on their behalf in connection with any Finance Document, each Bank confirms that it: 
  

	 	(a)	has made its own independent investigation and assessment of the financial condition and affairs of the Company and their related entities in connection with its participation in
this Agreement and has not relied exclusively on any information provided to it by the Agent or the Mandated Lead Arrangers in connection with any Finance Document; and 

  

	 	(b)	will continue to make its own independent appraisal of the creditworthiness of the Company and their related entities while any amount is or may be outstanding under the Finance
Documents or any Commitment is in force. 

  

	18.11	Information 

  

	(a)	The Agent shall promptly forward to the person concerned the original or a copy of any document which is delivered to the Agent by a Party for that person. 

 

	(b)	The Agent shall promptly supply a Bank with a copy of each document received by the Agent under Clause 4 (Conditions Precedent) upon the request and at the expense of that Bank.

  

	(c)	Except where this Agreement specifically provides otherwise, the Agent is not obliged to review or check the accuracy or completeness of any document it forwards to another Party.

  

	(d)	Except as provided above, the Agent has no duty: 

  

	 	(i)	either initially or on a continuing basis to provide any Bank with any credit or other information concerning the financial condition or affairs of the Company or any related entity
of the Company whether coming into its possession or that of any of its related entities before, on or after the date of this Agreement; or 

  

	 	(ii)	unless specifically requested to do so by a Bank in accordance with this Agreement, to request any certificates or other documents from the Company. 

  

	18.12	The Agent and each Mandated Lead Arranger individually 

  

	(a)	If it is also a Bank, each of the Agent and a Mandated Lead Arranger has the same rights and powers under this Agreement as any other Bank and may exercise those rights and powers
as though it were not the Agent or a Mandated Lead Arranger. 

  

	(b)	Each of the Agent and a Mandated Lead Arranger may: 

  

	 	(i)	carry on any business with the Company or its related entities; 

  

	 	(ii)	act as agent or trustee for, or in relation to any financing involving, the Company or its related entities; and 

  

	 	(iii)	retain any profits or remuneration in connection with its activities under this Agreement or in relation to any of the foregoing. 

  

					
		 	43	 	22 December 2005

	18.13	Indemnities 

  

	(a)	Without limiting the liability of the Company under the Finance Documents, each Bank shall forthwith on demand indemnify the Agent for its proportion of any liability or loss
incurred by the Agent in any way relating to or arising out of its acting as the Agent, except to the extent that the liability or loss arises directly from the Agent’s gross negligence or wilful misconduct. 

  

	(b)	A Bank’s proportion of the liability or loss set out in paragraph (a) above is the proportion which the Original Sterling Amount of its participation in the Loans (if any)
bear to the Original Sterling Amount of all the Loans on the date of the demand. If, however, there are no Loans outstanding on the date of demand, then the proportion will be the proportion which its relevant Commitment bears to the Total
Commitments at the date of demand or, if the Total Commitments have been cancelled, bore to the Total Commitments immediately before being cancelled. 

  

	18.14	Compliance 

  

	(a)	The Agent may refrain from doing anything which might, in its opinion, constitute a breach of any law or regulation or be otherwise actionable at the suit of any person, and may do
anything which, in its opinion, is necessary or desirable to comply with any law or regulation of any jurisdiction. 

  

	(b)	Without limiting paragraph (a) above, the Agent need not disclose any information relating to the Company or any of its related entities if the disclosure might, in the opinion
of the Agent, constitute a breach of any law or regulation or any duty of secrecy or confidentiality or be otherwise actionable at the suit of any person. 

  

	18.15	Resignation of Agent 

  

	(a)	Notwithstanding its irrevocable appointment, the Agent may resign by giving notice to the Banks and the Company, in which case the Agent may forthwith appoint one of its Affiliates
as successor Agent or, failing that, the Majority Banks may appoint a successor Agent. 

  

	(b)	If the appointment of a successor Agent is to be made by the Majority Banks but they have not, within 30 days after notice of resignation, appointed a successor Agent which accepts
the appointment, the retiring Agent may appoint a successor Agent. 

  

	(c)	The resignation of the retiring Agent and the appointment of any successor Agent will both become effective only upon the successor Agent notifying all the Parties that it accepts
the appointment. On giving the notification, the successor Agent will succeed to the position of the retiring Agent and the term Agent will mean the successor Agent. 

  

	(d)	The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request
for the purposes of performing its functions as the Agent under this Agreement. 

  

	(e)	Upon its resignation becoming effective, this Clause 18 shall continue to benefit the retiring Agent in respect of any action taken or not taken by it under or in connection with
the Finance Documents while it was the Agent, and, subject to paragraph (d) above, it shall have no further obligation under any Finance Document. 

  

	18.16	Banks 

 The Agent may treat each Bank as a Bank,
entitled to payments under this Agreement and as acting through its Facility Office(s) until it has received notice from the Bank to the contrary by not less than five Business Days prior to the relevant payment. 
  

					
		 	44	 	22 December 2005

	18.17	Extraordinary management time and resources 

 In
addition to the fees (if any) paid or payable to the Agent pursuant to Clause 19 (Fees), the Company shall, on demand by the Agent, reimburse it for its own account at such reasonable daily or hourly rates as the Agent may separately agree with the
Company from time to time, the reasonable cost of utilising its management time or other resources in connection with taking all such steps or other action which: 
  

	 	(a)	the Company requests, in connection with: 

  

	 	(i)	the granting or proposed granting of any waiver or consent under any Finance Document; or 

  

	 	(ii)	any amendment or proposed amendment to any Finance Document; or 

  

	 	(b)	the Company or the Majority Banks request(s) in connection with: 

  

	 	(i)	any breach by the Company of its obligations under any Finance Document or any investigations in respect of any such breach; or 

  

	 	(ii)	the preservation and enforcement of any of the rights of the Finance Parties under the Finance Documents; or 

  

	 	(iii)	the occurrence of a Default. 

  

	19.	FEES 

  

	19.1	Front-end fees 

 The Company shall pay to the Agent
for the Mandated Lead Arrangers front-end fees in the amounts agreed in the relevant Fee Letter. 
  

	19.2	Commitment fee 

  

	(a)	The Company shall pay to the Agent for each Bank a commitment fee computed at the rate of 30 per cent. of the applicable Margin per annum on the undrawn, uncancelled amount of
that Bank’s Commitment during the period from the date of this Agreement up to and including the Final Maturity Date. 

  

	(b)	Accrued commitment fee is payable quarterly in arrears. Accrued commitment fee is also payable to the Agent for the relevant Bank(s) on the cancelled amount of its Commitment at the
time the cancellation takes effect. 

  

	19.3	Utilisation fee 

  

	(a)	For each day on which the outstanding principal amount of the Loans is 50.0 per cent. or more of the Total Commitments at that time, the Company shall pay a utilisation fee to
the Agent, for the account of the Banks, of 0.025 per cent. per annum on the amount of the outstanding principal amount of the Loans on that day. 

  

	(b)	The utilisation fee is payable quarterly in arrear. Accrued utilisation fee is also payable to the Agent for the account of the Banks on the date that the Commitments are cancelled
and the Loans are prepaid or repaid in full. 

  

					
		 	45	 	22 December 2005

	19.4	Agent’s fee 

 The Company shall pay to the
Agent for its own account an agency fee in the amount and at the times agreed in the relevant Fee Letter. 
  

	19.5	VAT 

 Any fee referred to in this Clause 19 (Fees)
is exclusive of any value added tax or any other tax which might be chargeable in connection with that fee. If any value added tax or other tax is so chargeable, it shall be paid by the Company at the same time as it pays the relevant fee.

  

	20.	EXPENSES 

  

	20.1	Initial and special costs 

 The Company shall
forthwith on demand pay the Agent and each Mandated Lead Arranger the amount of all reasonable costs and expenses (including legal fees) incurred by each of them in connection with: 
  

	 	(a)	the negotiation, preparation, printing and execution of: 

  

	 	(i)	this Agreement and any other documents referred to in this Agreement; 

  

	 	(ii)	any other Finance Document (other than a Novation Certificate) executed after the date of this Agreement; 

  

	 	(b)	any amendment, waiver, consent or suspension of rights (or any proposal for any of the foregoing) requested by or on behalf of the Company and relating to a Finance Document or a
document referred to in any Finance Document; and 

  

	 	(c)	any other matter, not of an ordinary administrative nature, arising out of or in connection with a Finance Document. 

  

	20.2	Enforcement costs 

 The Company shall forthwith on
demand pay to each Finance Party the amount of all reasonable costs and expenses (including legal fees) incurred by it: 
  

	 	(a)	in connection with the enforcement of, or the preservation of any rights under, any Finance Document; or 

  

	 	(b)	in investigating any possible Default. 

  

	21.	STAMP DUTIES 

 The Company shall pay and forthwith
on demand indemnify each Finance Party against any liability it incurs in respect of any stamp, registration and similar tax which is or becomes payable in connection with the entry into, performance or enforcement of any Finance Document.

  

	22.	INDEMNITIES 

  

	22.1	Currency indemnity 

  

	(a)	If a Finance Party receives an amount in respect of the Company’s liability under the Finance Documents or if that liability is converted into a claim, proof, judgment or order
in a currency other than the currency (the contractual currency) in which the amount is expressed to be payable under the relevant Finance Document: 

  

	 	(i)	the Company shall indemnify that Finance Party as an independent obligation against any loss or liability arising out of or as a result of the conversion; 

 

					
		 	46	 	22 December 2005

	 	(ii)	if the amount received by that Finance Party, when converted into the contractual currency at a market rate in the usual course of its business, is less than the amount owed in the
contractual currency, the Company shall forthwith on demand pay to that Finance Party an amount in the contractual currency equal to the deficit; and 

  

	 	(iii)	the Company shall pay to the Finance Party concerned on demand any exchange costs and taxes payable in connection with any such conversion. 

  

	(b)	The Company waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency other than that in which it is expressed to be payable.

  

	22.2	Other indemnities 

 The Company shall forthwith on
demand indemnify each Finance Party against any loss or liability which that Finance Party incurs as a consequence of: 
  

	 	(a)	the occurrence of any Default; 

  

	 	(b)	the operation of Clause 2.5 (Change of Currency), 17.19 (Acceleration) or Clause 28 (Pro Rata Sharing); 

  

	 	(c)	any payment of principal or an overdue amount being received from any source otherwise than on its Repayment Date and, for the purposes of this paragraph (c), the Repayment Date of
an overdue amount is the last day of each Designated Term (as defined in Clause 8.5 (Default interest)); or 

  

	 	(d)	(other than by reason of negligence or default by a Finance Party) a Loan not being made after the Company has delivered a Request for that Loan. 

 The Company’s liability in each case includes any loss of margin or other loss or expense on account of funds borrowed, contracted for or utilised to
fund any amount payable under any Finance Document, any amount repaid or prepaid or any Loan. 
  

	23.	EVIDENCE AND CALCULATIONS 

  

	23.1	Accounts 

 Accounts maintained by a Finance Party in
connection with this Agreement are prima facie evidence of the matters to which they relate. 
  

	23.2	Certificates and determinations 

 Any certification
or determination by a Finance Party of a rate or amount under this Agreement is, in the absence of manifest error, conclusive evidence of the matters to which it relates. 
  

	23.3	Calculations 

 Interest (including any applicable
Mandatory Cost) and any fees accruing under this Agreement shall accrue from day to day and are calculated on the basis of the actual number of days elapsed and a year of 365 days or, in the case of interest payable on an amount denominated in an
Optional Currency only or where the market practice otherwise dictates, 360 days. 
  

					
		 	47	 	22 December 2005

	24.	AMENDMENTS AND WAIVERS 

  

	24.1	Procedure 

  

	(a)	Subject to Clause 24.2 (Exceptions), any term of the Finance Documents may be amended or waived with the agreement of the Company, the Majority Banks and the Agent. The Agent may
effect, on behalf of the Banks, an amendment to which they or the Majority Banks have agreed. 

  

	(b)	The Agent shall promptly notify the other Parties of any amendment or waiver effected under paragraph (a) above, and any such amendment or waiver shall be binding on all the
Parties. 

  

	24.2	Exceptions 

 An amendment or waiver which relates
to: 
  

	 	(a)	the definition of Majority Banks in Clause 1.1; 

  

	 	(b)	an extension of the date for, or a decrease in an amount or a change in the currency of, any payment under the Finance Documents; 

  

	 	(c)	an increase in, or extension of, a Bank’s Commitment; 

  

	 	(d)	a term of a Finance Document which expressly requires the consent of each Bank; 

  

	 	(e)	Clause 2.4 (Nature of a Finance Party’s rights and obligations), Clause 28 (Pro Rata Sharing) or this Clause 24; or 

  

	 	(f)	a right of a Bank to assign or transfer its rights or obligations under the Finance Documents, 

 may not be effected without the consent of each Bank. 
  

	24.3	Waivers and remedies cumulative 

 The rights of each
Finance Party under the Finance Documents: 
  

	 	(a)	may be exercised as often as necessary; 

  

	 	(b)	are cumulative and not exclusive of its rights under the general law; and 

  

	 	(c)	may be waived only in writing and specifically. 

 Delay in
exercising or non-exercise of any such right is not a waiver of that right. 
  

	25.	CHANGES TO THE PARTIES 

  

	25.1	Transfers by the Company 

 The Company may not
assign, transfer, novate or dispose of any of, or any interest in, its rights and/or obligations under this Agreement. 
  

					
		 	48	 	22 December 2005

	25.2	Transfers by Banks 

  

	(a)	A Bank (the Existing Bank) may at any time assign, transfer or novate any of its rights and/or obligations under this Agreement (in a minimum amount equal to
£10,000,000 or, if less with respect to a particular Bank, the balance of that Bank’s Commitment at the time of transfer) to another bank or financial institution, trust, fund or other entity which is a Qualifying Bank (the New
Bank). The prior consent of the Company is required for any such assignment, transfer or novation, unless: 

  

	 	(i)	the New Bank is another Bank or an Affiliate of a Bank; or 

  

	 	(ii)	a Default is outstanding. 

 However, the prior consent of
the Company must not be unreasonably withheld or delayed and will be deemed to have been given if, within 21 days of receipt by the Company of an application for consent, it has not been expressly refused. 
  

	(b)	A transfer of obligations will be effective only if either: 

  

	 	(i)	the obligations are novated in accordance with Clause 25.3 (Procedure for novations); or 

  

	 	(ii)	the New Bank confirms to the Agent and the Company that it is a Qualifying Bank and that it undertakes to be bound by the terms of this Agreement as a Bank in form and substance
satisfactory to the Agent. On the transfer becoming effective in this manner the Existing Bank shall be relieved of its obligations under this Agreement to the extent that they are transferred to the New Bank. 

  

	(c)	Nothing in this Agreement restricts the ability of a Bank to subcontract an obligation if that Bank remains liable under this Agreement for that obligation except that no Bank may
subcontract any such obligation if the effect of such contract would be that a person other than a Qualifying Bank has any beneficial entitlement to any interest received by it under this Agreement. 

  

	(d)	On each occasion that an Existing Bank assigns, transfers or novates any of its rights and/or obligations under this Agreement, the New Bank shall, on the date the assignment,
transfer and/or novation takes effect, pay to the Agent for its own account a fee of £1,000. 

  

	(e)	An Existing Bank is not responsible to a New Bank for: 

  

	 	(i)	the execution, genuineness, validity, enforceability or sufficiency of any Finance Document or any other document; 

  

	 	(ii)	the collectability of amounts payable under any Finance Document; 

  

	 	(iii)	the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document; or 

  

	 	(iv)	the financial condition of the Company. 

  

	(f)	Each New Bank confirms to the Existing Bank and the other Finance Parties that it: 

  

	 	(i)	has made its own independent investigation and assessment of the financial condition and affairs of the Company and its related entities in connection with its participation in this
Agreement and has not relied exclusively on any information provided to it by the Existing Bank in connection with any Finance Document; and 

  

					
		 	49	 	22 December 2005

	 	(ii)	will continue to make its own independent appraisal of the creditworthiness of the Company and its related entities while any amount is or may be outstanding under this Agreement or
any Commitment is in force. 

  

	(g)	Nothing in any Finance Document obliges an Existing Bank to: 

  

	 	(i)	accept a re-transfer from a New Bank of any of the rights and/or obligations assigned, transferred or novated under this Clause; or 

  

	 	(ii)	support any losses incurred by the New Bank by reason of the non-performance by the Company of its obligations under this Agreement or otherwise. 

  

	(h)	Any reference in this Agreement to a Bank includes a New Bank, but excludes a Bank if no amount is or may be owed to or by that Bank under this Agreement and its Commitment has been
cancelled or reduced to nil. 

  

	(i)	No assignment or transfer under this Clause will be effective until the Agent has completed all know your customer requirements relating to any person that it is required to carry
out in relation to such assignment or transfer. The Agent is not obliged to execute a Novation Certificate until it has completed all know customer requirements to its satisfaction. 

  

	25.3	Procedure for novations 

  

	(a)	A novation is effected if the Existing Bank and the New Bank deliver to the Agent a Novation Certificate in the form of Schedule 5 and the Agent executes it.

  

	(b)	Each Party (other than the Existing Bank and the New Bank) irrevocably authorises the Agent to execute any duly completed Novation Certificate on its behalf.

  

	(c)	To the extent that they are expressed to be the subject of the novation in the Novation Certificate: 

  

	 	(i)	the Existing Bank and the other Parties (the existing Parties) will be released from their obligations to each other (the discharged obligations);

  

	 	(ii)	the New Bank and the existing Parties will assume obligations towards each other which differ from the discharged obligations only insofar as they are owed to or assumed by the New
Bank instead of the Existing Bank; 

  

	 	(iii)	the rights of the Existing Bank against the existing Parties and vice versa (the discharged rights) will be cancelled; and 

  

	 	(iv)	the New Bank and the existing Parties will acquire rights against each other which differ from the discharged rights only insofar as they are exercisable by or against the New Bank
instead of the Existing Bank, 

 all on the date of execution of the Novation Certificate by the Agent or, if later, the date
specified in the Novation Certificate. The completed Novation Certificate must be delivered to the Agent at least five Business Days before the date on which it is stated to be effective or such other date agreed by the Agent. If no agreement can be
reached by the Agent the novation will not be effective. 
  

					
		 	50	 	22 December 2005

	25.4	Reference Banks 

 If a Reference Bank (or, if a
Reference Bank is not a Bank, the Bank of which it is an Affiliate) ceases to be one of the Banks, the Agent shall (in consultation with the Company) appoint another Bank or an Affiliate of a Bank to replace that Reference Bank. 
  

	25.5	Register 

 The Agent shall keep a register of all
the Parties and shall supply any other Party (at that Party’s expense) with a copy of the register on request. 
  

	25.6	Change of Facility Office 

 No Bank will change its
Facility Office if, at the time of the change, circumstances exist which would oblige the Company to pay that Bank any amount under Clause 11 (Taxes) or Clause 13 (Increased Costs) which it would not have been obliged to pay if that Bank had
retained the same Facility Office. 
  

	26.	DISCLOSURE OF INFORMATION 

 A Bank may disclose to
one of its Affiliates or any person with whom it is proposing to enter, or has entered into, any kind of transfer, participation or other agreement in relation to this Agreement: 
  

	 	(a)	a copy of any Finance Document; and 

  

	 	(b)	any information which that Bank has acquired under or in connection with any Finance Document. 

 Provided that any such Affiliate or person has entered into a confidentiality undertaking substantially in the form of Schedule 9 (Form of Confidentiality
Undertaking) or in any other form agreed between the Company and the Agent. 
  

	27.	SET-OFF 

 A Finance Party may set off any matured
obligation owed by the Company under this Agreement (to the extent beneficially owned by that Finance Party) against any obligation (whether or not matured) owed by that Finance Party to the Company, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off. If either
obligation is unliquidated or unascertained, the Finance Party may set off in an amount estimated by it in good faith to be the amount of that obligation. 
  

	28.	PRO RATA SHARING 

  

	28.1	Redistribution 

 If any amount owing by the Company
under this Agreement to a Finance Party (the recovering Finance Party) is discharged by payment, set-off or any other manner other than through the Agent in accordance with Clause 10 (Payments) (a recovery), then: 
  

	 	(a)	the recovering Finance Party shall, within three Business Days, notify details of the recovery to the Agent; 

  

					
		 	51	 	22 December 2005

	 	(b)	the Agent shall determine whether the recovery is in excess of the amount which the recovering Finance Party would have received had the recovery been received by the Agent and
distributed in accordance with Clause 10 (Payments); 

  

	 	(c)	subject to Clause 28.3 (Exception), the recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the redistribution)
equal to the excess; 

  

	 	(d)	the Agent shall treat the redistribution as if it were a payment by the Company under Clause 10 (Payments) and shall pay the redistribution to the Finance Parties (other than
the recovering Finance Party) in accordance with Clause 10.7 (Partial payments); and 

  

	 	(e)	after payment of the full redistribution, the recovering Finance Party will be subrogated to the portion of the claims paid under paragraph (d) above, and the Company will owe
the recovering Finance Party a debt which is equal to the redistribution, immediately payable and of the type originally discharged. 

  

	28.2	Reversal of redistribution 

 If under Clause 28.1
(Redistribution): 
  

	 	(a)	a recovering Finance Party must subsequently return a recovery, or an amount measured by reference to a recovery, to the Company; and 

  

	 	(b)	the recovering Finance Party has paid a redistribution in relation to that recovery, 

 each Finance Party shall, within three Business Days of demand by the recovering Finance Party through the Agent, reimburse the recovering Finance Party all or the appropriate portion of the redistribution paid to
that Finance Party. Thereupon the subrogation in Clause 28.1(e) (Redistribution) will operate in reverse to the extent of the reimbursement. 
  

	28.3	Exception 

 A recovering Finance Party need not pay
a redistribution to the extent that it would not, after the payment, have a valid claim against the Company in the amount of the redistribution pursuant to Clause 28.1(e) (Redistribution). 
  

	29.	SEVERABILITY 

 If a provision of any Finance
Document is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect: 
  

	 	(a)	the legality, validity or enforceability in that jurisdiction of any other provision of the Finance Documents; or 

  

	 	(b)	the legality, validity or enforceability in other jurisdictions of that or any other provision of the Finance Documents. 

  

	30.	COUNTERPARTS 

 This Agreement may be executed in any
number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement. 
  

					
		 	52	 	22 December 2005

	31.	NOTICES 

  

	31.1	Giving of notices 

 All notices or other
communications under or in connection with this Agreement shall be given in writing or by facsimile. Any such notice will be deemed to be given as follows: 
  

	 	(a)	if in writing, when delivered; and 

  

	 	(b)	if by facsimile, when received in complete and legible form. 

 However, a notice given in accordance with the above but received on a non-working day or after business hours in the place of receipt will only be deemed to be given on the next working day in that place. 
  

	31.2	Addresses for notices 

  

	(a)	The address and facsimile number of each Party (other than the Agent) for all notices under or in connection with this Agreement are: 

  

	 	(i)	that notified by that Party for this purpose to the Agent on or before it becomes a Party; or 

  

	 	(ii)	any other notified by that Party for this purpose to the Agent by not less than five Business Days’ notice. 

  

	(b)	The address and facsimile number of the Agent is: 

 For
Operational Duties (e.g. Utilisations; Rate Fixing; Fee & Interest calculation, etc.) 
  

			
	 The Royal Bank of Scotland plc
	  	
	 Level 3
	  	
	 2.5 Devonshire Square
	  	
	 London EC2M 4XJ
	  	
		
	 Facsimile number:
	  	+44 20 7615 0153
		
	 Attention:
	  	Loan Administration/LAU

 For Non-Operational Duties (e.g. Covenant Compliance; Amendments and Waivers, etc.)

  

			
	 The Royal Bank of Scotland plc
	  	
	 Level 7
	  	
	 135 Bishopsgate
	  	
	 London EC2M 3UR
	  	
		
	 Facsimile number:
	  	+44 20 7085 4564
		
	 Attention:
	  	Syndicated Loans Agency

 or such other as the Agent may notify to the other Parties by not less than five Business
Days’ notice. 
  

	(c)	The Agent shall, promptly upon request from any Party, give to that Party the address or facsimile number of any other Party applicable at the time for the purposes of this Clause.

  

					
		 	53	 	22 December 2005

	32.	GOVERNING LAW 

 This Agreement is governed by
English law. 
  

	33.	JURISDICTION 

  

	(a)	Each of the parties hereto irrevocably agrees, for the benefit of the Agent and the Banks, that the courts of England shall have jurisdiction to hear and determine any suit, action
or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and, for such purposes, irrevocably submits to the jurisdiction of such courts. 

  

	(b)	The Company irrevocably waives any objection which it might now or hereafter have to the courts referred to in paragraph (a) above being nominated as the forum to hear and
determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with this Agreement and agrees not to claim that any such court is not a convenient or appropriate forum. 

  

	(c)	The submission to the jurisdiction of the courts referred to in paragraph (a) above shall not (and shall not be construed so as to) limit the right of the Agent or the Banks to
take proceedings in any other court of competent jurisdiction nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdiction, whether concurrently or not. 

 

	34.	SERVICE OF PROCESS 

 Without prejudice to any other
mode of service allowed under any relevant law, the Company: 
  

	 	(a)	irrevocably appoints its London office at 30 Cannon Street, London EC4M 6XH as its agent for service of process in relation to any proceedings before the English courts in
connection with any Finance Documents; and 

  

	 	(b)	agrees that any failure by a process agent to notify the Company of the process will not invalidate the proceedings concerned. 

 THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement. 
  

					
		 	54	 	22 December 2005

 SCHEDULE 1 
 ORIGINAL PARTIES 
  

			
	 Original Bank
	  	Commitments
	 	  	(£)
	 The Royal Bank of Scotland plc
	  	46,666,668.00
	 The Bank of Tokyo-Mitsubishi, Ltd.
	  	46,666,666.00
	 BNP Paribas
	  	46,666,666.00
	 Barclays Bank PLC
	  	40,000,000.00
	 Commerzbank Aktiengesellschaft, London Branch
	  	40,000,000.00
	 Deutsche Bank AG, London Branch
	  	40,000,000.00
	 HSBC Bank plc
	  	40,000,000.00
	 ING Bank N.V., London Branch
	  	40,000,000.00
	 JPMorgan Chase Bank, N.A.
	  	40,000,000.00
	 Morgan Stanley Bank
	  	40,000,000.00
	 TD Bank Europe Limited
	  	40,000,000.00
	 UBS AG, London Branch
	  	40,000,000.00
		  	 
	 Total
	  	500,000,000.00
		  	 

  

					
		 	55	 	22 December 2005

 SCHEDULE 2 
 CONDITIONS PRECEDENT DOCUMENTS 
  

	1.	A copy of the memorandum and articles of association, certificate of incorporation and certificate of incorporation on change of name (if any) of the Company or a certificate of an
authorised signatory of the Company confirming that the copy of those documents previously delivered to the Agent in connection with the Existing Facility Agreement is still correct, complete and in full force and effect as at a date no earlier than
the date of this Agreement. 

  

	2.	A copy of a resolution of the Group Finance Committee of the Company: 

  

	 	(a)	approving the terms of, and the transactions contemplated by the Finance Documents resolving that it execute the Finance Documents to which it is a party and any related and/or
ancillary documents; 

  

	 	(b)	authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and 

  

	 	(c)	authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices to be signed and/or despatched by it under or in connection with
the Finance Documents. 

  

	3.	A copy of a resolution of the board of directors of the Company appointing the Group Finance Committee referred to in paragraph 2 above. 

  

	4.	A certificate of a director of the Company certifying that the utilisation of the Facility in full would not cause any internal borrowing limit binding on the Company to be
exceeded. 

  

	5.	A certificate of an authorised signatory of the Company certifying: 

  

	 	(a)	that each copy document specified in this Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement; and

  

	 	(b)	the specimen signatures of its authorised signatories. 

  

	6.	A legal opinion of Allen & Overy LLP, legal advisers to the Agent, addressed to the Finance Parties substantially in the form of Schedule 6. 

  

	7.	A legal opinion of Maclay Murray & Spens, legal advisers to the Agent in Scotland, addressed to the Finance Parties substantially in the form of Schedule 7.

  

	8.	Evidence that each of the Existing Facility Agreements have been cancelled and any outstandings under each of the Existing Facility Agreements have been or will on the first
Utilisation Date be repaid in full. 

  

	9.	A copy of the Original Group Accounts and the latest published consolidated financial statements of the Company being the interim consolidated financial statements for the six month
period ended 30 September 2005. 

  

	10.	Evidence that all fees and expenses then due and payable from the Company under the Finance Documents have been or will be paid by the first Utilisation Date.

  

					
		 	56	 	22 December 2005

	11.	Evidence that the process agent referred to in Clause 34 (Service of Process) has accepted the appointment. 

  

	12.	A copy of any other authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance
of, and the transactions contemplated by, any Finance Document or for the validity and enforceability of any Finance Document and which, in either case, is notified to the Company prior to the execution of this Agreement. 

 

					
		 	57	 	22 December 2005

 SCHEDULE 3 
 CALCULATION OF THE MANDATORY COST 
 General 
 The Mandatory Cost is the weighted average of the rates for each Bank calculated below by the Agent on the first day of a Term. The Agent must distribute each amount of Mandatory Cost among the Banks on the basis of
the rate for each Bank. 
  

	1.	For a Bank lending from a Facility Office in the U.K. 

  

	(a)	The relevant rate for a Bank lending from a Facility Office in the U.K. is calculated in accordance with the following formulae: 

 for a Loan in Sterling: 
 

 
 for any other Loan: 
 

 
 where on the day of application of the formula: 
  

	 	A	is the percentage of that Bank’s eligible liabilities (in excess of any stated minimum) which the Bank of England requires it to hold on a non-interest-bearing deposit account
in accordance with its cash ratio requirements; 

  

	 	B	is LIBOR for that Term; 

  

	 	C	is the percentage of that Bank’s eligible liabilities which the Bank of England requires it to place as a special deposit; 

  

	 	D	is the interest rate per annum allowed by the Bank of England on a special deposit; and 

  

	 	E	is calculated by the Agent as being the average of the rates of charge supplied by the Reference Banks to the Agent under paragraph (d) below and expressed in pounds per
£1 million. 

  

	(b)	For the purposes of this paragraph 2: 

  

	 	(i)	eligible liabilities and special deposit have the meanings given to them at the time of application of the formula by the Bank of England; 

  

	 	(ii)	fees rules means the then current rules on periodic fees in the Supervision Manual of the FSA Handbook; and 

  

	 	(iii)	tariff base has the meaning given to it in the fees rules. 

  

					
		 	58	 	22 December 2005

					
	(c)	  	(i)	  	In the application of the formulae, A, B, C and D are included as figures and not as percentages, e.g. if A = 0.5 per cent. and B = 15 per cent., AB is calculated as 0.5 x 15. A
negative result obtained by subtracting D from B is taken as zero.
			
		  	(ii)	  	Each rate calculated in accordance with a formula is, if necessary, rounded upward to four decimal places.
			
	(d)	  	(i)	  	Each Reference Bank must supply to the Agent the rate of charge payable by that Reference Bank to the Financial Services Authority under the fees rules (calculated by that Reference Bank as
being the average of the rates of charge within fee-block Category A1 (Deposit acceptors) applicable to that Reference Bank but, for this purpose, applying any applicable discount and ignoring any minimum fee required under the fees rules) and
expressed in pounds per £1 million of the tariff base of that Reference Bank.
			
		  	(ii)	  	Each Reference Bank must promptly notify the Agent of any change to the rate of charge.
			
	(e)	  	(i)	  	Each Bank and each Reference Bank must supply to the Agent the information required by it to make a calculation of the rate for that Bank or Reference Bank. The Agent may assume that this
information is correct in all respects.
			
		  	(ii)	  	If a Bank or a Reference Bank fails to do so, the Agent may assume that the Bank’s or that Reference Bank’s obligations in respect of cash ratio deposits, special deposits and the fees
rules are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the U.K.
			
		  	(iii)	  	The Agent has no liability to any Party if its calculation over or under compensates any Bank.
		
	2.	  	For a Bank lending from a Facility Office in a Participating Member State
		
	(a)	  	The relevant rate for a Bank lending from a Facility Office in a Participating Member State is the percentage rate per annum notified by that Bank to the Agent as its cost of
complying with the minimum reserve requirements of the European Central Bank.
		
	(b)	  	If a Bank fails to specify a rate under paragraph (a) above, the Agent will assume that the Bank has not incurred any such cost.
		
	3.	  	Changes
		
		  	The Agent may, after consultation with the Company and the Banks, notify all the Parties of any amendment to this Schedule which is required to reflect:
		
		  	 (a)    any change in law or regulation; or

		
		  	 (b)    any requirement imposed by the Bank of England, the Financial Services Authority or the European
Central Bank (or, in any case, any successor authority).

		
		  	Any notification will be, in the absence of manifest error, conclusive and binding on all the Parties.

  

					
		 	59	 	22 December 2005

 SCHEDULE 4 
 FORM OF REQUEST 
 To:     THE ROYAL BANK OF SCOTLAND PLC as Agent 
 From: SCOTTISH POWER PLC 
 Date:
[            ] 
 Scottish Power plc-£500,000,000 Revolving Credit
Agreement 
 dated [·] 2005 
  

	1.	We wish to borrow a Loan as follows: 

  

	 	(a)	Utilisation Date: [            ] 

  

	 	(b)	Original Sterling Amount: £[            ] 

  

	 	(c)	Currency: [            ] 

  

	 	(d)	Term: [            ] 

  

	 	(e)	Payment/delivery instructions: [            ] 

  

	2.	We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Request. 

  

	3.	We confirm that the Loan will be used in accordance with Clause 3 (Purpose). 

  

	4.	We confirm that the borrowing of the above referenced Loan will not cause any borrowing limit binding on Scottish Power plc to be exceeded. 

 By: 
 SCOTTISH POWER PLC 

Authorised Signatory 
  

					
		 	60	 	22 December 2005

 SCHEDULE 5 
 FORM OF NOVATION CERTIFICATE 
  

			
	To:	  	THE ROYAL BANK OF SCOTLAND PLC as Agent
		
	From:	  	[THE EXISTING BANK] and [THE NEW BANK]

 Date: [            ] 
 Scottish Power plc-£500,000,000 Revolving Credit Agreement 
 dated [·] 2005 
 We refer to Clause 25.3 (Procedure for novations). 
  

	1.	We [            ] (the Existing Bank) and
[            ] (the New Bank) agree to the Existing Bank and the New Bank novating all the Existing Bank’s rights and obligations referred to in the Schedule in accordance with
Clause 25.3 (Procedure for novations). 

  

	2.	The specified date for the purposes of 25.3(c) is [date of novation]. 

  

	3.	The Facility Office and address for notices of the New Bank for the purposes of Clause 31.2 (Addresses for notices) are set out in the Schedule. 

  

	4.	This Novation Certificate is governed by English law. 

 THE SCHEDULE 
 Rights and obligations to be novated 
 [Details of the rights and obligations of the Existing Bank to be novated]. 
 [New
Bank] 
 [Facility Office Address for notices] 
  

					
	[Existing Bank]	  	[New Bank]	  	THE ROYAL BANK OF SCOTLAND PLC
			
	By:	  	By:	  	By:
			
	Date:	  	Date:	  	Date:

  

					
		 	61	 	22 December 2005

 SCHEDULE 6 
 FORM OF LEGAL OPINION OF ALLEN & OVERY LLP 
  

			
	To:	  	The Finance Parties named as original parties
		  	to the Credit Agreement (as defined below).

 , 2005 
 Dear Sirs, 
 Scottish Power plc (the
Company) - £500,000,000 Credit Agreement dated [                    ], 2005 (the Credit Agreement) 
 We have acted as legal advisers in England to The Mandated Lead Arrangers in connection with a Credit Agreement dated
[            ], 2005 (the Credit Agreement) made between among others, the Company as borrower, the Banks (as defined therein) and the Agent. 
 Subject to the qualifications set out below and to any matters not disclosed to us, we are of the opinion that, so far as the present laws of England are concerned:

  

	(A)	Legal validity The Credit Agreement constitutes legally binding, valid and enforceable obligations of the Company. 

  

	(B)	Non-violation The execution, delivery and performance by the Company of the Credit Agreement will not violate any provision of any English law applicable to companies
generally. 

  

	(C)	Stamp duties No stamp or registration duty or similar taxes or charges are payable in the United Kingdom in respect of the execution or delivery of the Credit Agreement.

  

	(D)	Registrations It is not necessary to file, register or record the Credit Agreement in any public office or elsewhere in England. 

 The qualifications to which this opinion is subject are as follows: 
  

	(i)	We assume the Credit Agreement has been duly authorised and entered into by each party to it. 

  

	(ii)	This opinion is subject to all insolvency and other laws affecting the rights of creditors generally. 

  

	(iii)	We assume that no foreign law affects the conclusions stated above. We assume, in particular, that, so far as the laws of Scotland are concerned, the Credit Agreement constitutes a
legal, valid, binding and enforceable obligation of the Company. In this regard we have relied on copies of the legal opinion referred to in paragraph 7 of Schedule 2 to the Credit Agreement. 

  

	(iv)	The term “enforceable” means that a document is of a type and form enforced by the English courts. It does not mean that each obligation will be enforced in accordance
with its terms. Certain rights and obligations of the Company may be qualified by the non-conclusivity of certificates, doctrines of good faith and fair conduct, the availability of equitable remedies and other matters, but in our view these
qualifications would not defeat your legitimate expectations in any material respect. 

 This opinion is given for your sole benefit and may
not be relied upon by or disclosed to any other person other thank if required by law. 
 Yours faithfully, 
  

					
		 	62	 	22 December 2005

 SCHEDULE 7 
 FORM OF LEGAL OPINION OF MACLAY MURRAY & SPENS 
  

			
	(1)	  	The Royal Bank of Scotland plc
		  	135 Bishopsgate
		  	London
		  	EC2M 3UR
		  	(as Agent for the Finance Parties) (as such terms are defined in the Facility Agreement which is defined below)
		
	and	  	
		
	(2)	  	Each of the Finance Parties (as defined in the Facility Agreement which is defined below)

 [            ]
December 2005 
 Dear Sirs, 
 You have asked for our opinion in connection with an agreement dated [            ] December 2005 between Scottish Power plc as borrower (the Company), The Bank of
Tokyo-Mitsubishi, Ltd., BNP Paribas and The Royal Bank of Scotland plc as Mandated Lead Arrangers, the Original Banks (as defined therein) and the Agent (the Facility Agreement). 
 Unless otherwise defined in this opinion, words and expressions defined in the Facility Agreement shall bear the same meanings in this opinion. 
 For the purposes of this opinion, we have examined copies of and base our opinion on the following documents: 
  

	(a)	a conformed copy of the Facility Agreement; 

  

	(b)	a certified copy of the Memorandum and Articles of Association of the Company; 

  

	(c)	an online report relating to the Company obtained from the Registrar of Companies in Edinburgh on [    ] December 2005 (the Company Search);

  

	(d)	a search of the Companies Section of the Register of Insolvencies dated [    ] December 2005 (the Insolvency Search); 

  

	(e)	a certified copy of the minutes of a meeting of the Group finance committee of the board of directors of the Company held on
[            ] 2005 (the Directors’ Minutes); 

  

	(f)	a certificate dated [    ] December 2005 of the Secretary of the Company confirming that by a resolution of the board of directors of the Company passed on
[            ] 2005, authority had been delegated to the treasury committee of the board of directors to consider, approve and implement the renewal of the facility provided under the
Facility Agreement (the Secretary’s Certificate); 

  

	(g)	a certificate dated [            ] 2005 of a director of the Company confirming that the utilisation by the Company of
the Facility (the Director Certificate) in full would not cause any internal borrowing limit binding on the Company to be exceeded and that the Company is not unable to pay its debts within the meaning of section 123 of the Insolvency Act
1986; and 

  

					
		 	63	 	22 December 2005

	(h)	a certificate dated [            ] 2005 of an authorised signatory of the Company the Authorised Signatory
Certificate) certifying that each of the items in paragraphs (b) and (e) is correct, complete and in full force and certifying the specimen signatures of the Company’s authorised signatories. The Secretary’s Certificate,
Director Certificate and Authorised Signatory Certificate are herein together referred to as the Certificates). 

 We have not made any
other enquiries concerning the Company and in particular we have not concerned ourselves with investigating or verifying any matters of fact or opinion (whether set out in any of the documents referred to above or elsewhere) other than as expressly
stated herein. 
 We have assumed for the purposes of this opinion: 
  

	(i)	the capacity, power and authority of each of the Mandated Lead Arrangers, the Original Banks and the Agent to enter into and perform their respective obligations under the Facility
Agreement and the due execution and delivery of the Facility Agreement by each of the Mandated Lead Arrangers, the Original Banks and the Agent; 

  

	(ii)	that the Facility Agreement has been signed by [Adrian Coats] on behalf of the Company and that the Facility Agreement has been duly delivered; 

  

	(iii)	the conformity to original documents of all documents supplied to us as photocopies, specimen or facsimile copies; 

  

	(iv)	that each of the statements contained in the Certificates (on which we have relied without further inquiry) is true and correct as at the date hereof; 

  

	(v)	that the meeting of the Group finance committee of the board of directors of the Company held on [            ] 2005 was
duly convened and held; 

  

	(vi)	that the information disclosed by the Company Search was accurate in all respects and that such Search did not fail to disclose any material information which had been delivered for
registration but which did not appear on the online report supplied by the Companies Registry in Edinburgh; 

  

	(vii)	that the Insolvency Search is complete and accurate in all respects and does not fail to disclose any material information; 

  

	(viii)	the Company has not passed a voluntary winding-up resolution, no petition has been presented or order made by the Court for the winding up, dissolution or administration of the
Company and no receiver, trustee, administrator or similar official has been appointed in relation to the Company or any of its assets or revenues in each case which is not ascertainable from the Company Search and the Insolvency Search;

  

	(ix)	that the Facility Agreement constitutes legal, valid and binding obligations of the parties thereto under English law to which it is expressed to be subject and that the performance
of the obligations thereunder is not illegal or unenforceable by virtue of the law of any jurisdiction (other than Scotland) in which they are to be performed; and 

  

	(x)	that the execution and delivery of the Facility Agreement by the Company and the performance of its obligations thereunder is in the interests of the Company and that the Facility
Agreement has been entered into for bona fide commercial reasons and on arms length terms by each of the parties thereto. 

 We have not made
any investigation of and do not express any opinion as to the laws of any jurisdiction outside Scotland and this opinion relates only to the laws of Scotland as they exist at the date hereof. Based upon and subject to the foregoing and subject to
the reservations hereinafter referred to and to any matters not disclosed to us, we are of the opinion that: 
  

	1.	The Company is a limited liability company duly incorporated under the laws of Scotland and has full corporate power and authority to execute, deliver and perform its obligations
under the Facility Agreement. 

  

					
		 	64	 	22 December 2005

	2.	The execution and delivery by the Company of the Facility Agreement and the performance of its obligations thereunder have been duly authorised by all requisite corporate action on
its part. 

  

	3.	The obligations of the Company under the Facility Agreement are legal, valid and binding obligations of the Company under the law of Scotland and would be so treated in the Courts
of Scotland. 

  

	4.	Neither the Company nor any of its assets are immune from any suit or other legal process under the law of Scotland. 

  

	5.	The Finance Parties by entering into the Facility Agreement will not be considered to be resident in Scotland, carrying on business in Scotland by virtue of having entered into the
Facility Agreement. 

  

	6.	There is no legal requirement for any Finance Party to be licensed, qualified or entitled to do business in Scotland in order to enter into and enforce its rights under the Facility
Agreement. 

  

	7.	The entry into and performance of the Facility Agreement by the Company and the transactions and matters to be implemented thereunder do not violate (i) Scottish Law or
(ii) the Memorandum and Articles of Association of the Company. 

  

	8.	It is not necessary to file, register or record the Facility Agreement with any court or authority in Scotland. 

  

	9.	The claims of the Finance Parties under the Facility Agreement will rank at least pari passu with the claims of all other unsecured and unsubordinated creditors of the Company
except for claims in respect of preferential debts (as defined in Schedule 6 of the Insolvency Act 1986) 

  

	10.	No stamp, registration or other similar taxes or charges are payable in Scotland with respect to the execution or delivery of the Facility Agreement. 

  

	11.	The choice of English law to govern the Facility Agreement is valid and effective under the private international law of Scotland. Subject to the usual exceptions affecting such
matters as procedure, the availability of remedies and any provision which is repugnant to the law of Scotland, the law of England will accordingly be applied by the Courts of Scotland if any dispute arising from or contractual claim connected with
the Facility Agreement comes under their jurisdiction. A judgment rendered against the Company by a competent court in England and registered in Scotland pursuant to the provisions of the Civil Jurisdiction and Judgments Act 1982 will be enforceable
by the Scottish Courts. 

  

	12.	The submission by the Company to the jurisdiction of the courts of England is valid and binding on the Company. 

  

	13.	Neither the Company Search nor the Insolvency Search show that the Company is in liquidation. 

  

					
		 	65	 	22 December 2005

 The foregoing opinion is subject to the following qualifications: 
  

	(a)	We do not express any view on the particular remedies available on enforcement, such as specific implement or interdict, which are discretionary remedies. 

 

	(b)	The enforcement of the Facility Agreement may be limited by applicable laws relating to prescription, limitation, bankruptcy, liquidation, receivership, administration, insolvency
or other laws relating to creditors’ rights generally or by the application of rules of equity or public policy. 

  

	(c)	A Scottish court may refuse to give effect to any provisions of the Facility Agreement providing for the payment of legal costs and other costs, charges and expenses in respect of
unsuccessful litigation brought before such court or where that court has itself made an order for costs. 

  

	(d)	Any provision contained in the Facility Agreement to the effect that a calculation and/or certification will be conclusive and binding may not be effective if such calculation or
certification is fraudulent or erroneous on its face and will not necessarily prevent judicial enquiry into the merit of any claim under the relative document. 

  

	(e)	Any provision in the Facility Agreement relating to default interest would be unenforceable if it were held to constitute a penalty and not a genuine and reasonable pre-estimate of
the damage likely to be suffered as a result of the default in payment of the amount in question. 

  

	(f)	We express no opinion whether any provision in the Facility Agreement conferring on any party thereto a right of set off or similar right would be effective against a liquidator or
creditor. 

  

	(g)	We have not been asked to advise you in connection with the preparation of the Facility Agreement and we therefore express no opinion on the implications of the Facility Agreement
or on whether the Facility Agreement gives effect to the commercial intentions of the parties. 

  

	(h)	Any undertakings or indemnities in relation to United Kingdom stamp duties given by the Company may be void under the provisions of Section 117 of the Stamp Act 1891. However,
we refer you to our opinion at paragraph 6 above that no stamp duty is payable in Scotland with respect to the execution or delivery of the Facility Agreement by the Company. 

  

	(i)	A Scottish court may stay proceedings if concurrent proceedings are being brought elsewhere. 

  

	(j)	The effectiveness of terms exculpating a party from a liability or duty otherwise owed is limited by law. 

  

	(k)	Where any party to the Facility Agreement is vested with a discretion or may determine a matter in its opinion, that party may be required to exercise its discretion in good faith,
reasonably and for a proper purpose. 

  

	(l)	Although monetary decrees of Scottish courts would normally be expressed in Sterling, in monetary claims for foreign currency Scottish courts may (but are not obliged to) issue a
decree expressed as an order to pay the appropriate amount of foreign currency. The decree will, however, be required to be converted into Sterling for the purpose of diligence and enforcement. Indebtedness denominated in a foreign currency claimed
in the winding up of a Scottish company must be converted into Sterling for this purpose. 

  

	(m)	We express no opinion on whether any provision in the Facility Agreement purporting to impose a trust in monies received would be effective against a liquidator or creditor.

  

					
		 	66	 	22 December 2005

	(n)	Any power of attorney conferred by the Facility Agreement might not survive the winding up, administration or receivership of the Company granting such power of attorney.

  

	(o)	The Scottish courts may not give effect to any provision in the Facility Agreement which provides that in the event of any invalidity, illegality or unenforceability of any
provision of such document, the remaining provisions of that document shall not be affected or impaired, particularly if to do so would require the court to make a new contract for the parties. 

  

	(p)	Under the provisions of Council Regulation (EC) No 44/2001 of 22 December 2000 and the Civil Jurisdiction and Judgements Act 1982 (as amended by the Civil Jurisdiction and
Judgements Order 2001) there is a procedure for the registration of English judgements in Scotland. In order to have an English judgement so registered the original judgement, signed by an Officer of Court together with the Court stamp, must be
produced. In addition all appeal procedures in respect of the judgement must be exhausted. Where, in compliance with this procedure, registration of an English judgment takes place, there is no need for any further hearing in Scotland and a creditor
can, after registration, take steps to enforce the English judgement in Scotland in accordance with Scottish enforcement procedure. 

 A Scottish court may decline jurisdiction where the Facility Agreement includes a prorogation agreement on the principle of forum non conveniens. Where the Scottish courts entertain jurisdiction, expert evidence would require to be led on
any relevant provisions of English law. If the creditor is successful, a Scottish court will award decree in favour of the creditor against the debtor. Such a decree is the equivalent of an English judgement and, after obtaining such a decree, a
creditor can proceed to enforcement in Scotland in accordance with Scottish procedure. 
  

	(q)	We express no opinion on whether any authorisations or exemptions of any governmental, judicial or public body or authority in Scotland are required for the execution of the
Facility Agreement, the performance by the Company of its obligations thereunder or the validity or enforceability of the Facility Agreement. 

 This opinion shall be governed by and construed in accordance with the law of Scotland. 
 This opinion is strictly limited to the matters specifically stated herein and is not to be read as extending by implication to any other matter. 
 This opinion is provided solely for the benefit of the persons to whom it is addressed and may not be communicated to or relied upon by any other person, firm or
corporation whatsoever other than for the purposes of disclosure for information only to legal advisors, auditors and, to the extent required by law, regulators of the addressees. 
 Yours faithfully, 
  

					
		 	67	 	22 December 2005

 SCHEDULE 8 
 EXISTING BORROWINGS 
  

			
	 Description
	  	Final Maturity
	 6.715% 25,000,000 GBP EMTN
	  	13/2/2008
	 Variable 30,000,000 GBP EMTN
	  	17/6/2008
	 Variable 9,000,000 EUR EMTN
	  	30/6/2008
	 5.03% 125,000,000 NLG EMTN
	  	15/7/2008
	 5.25% 725,000,000 deutschemark bond
	  	4/8/2008
	 *4% 700,000,000 USD convertible bond
	  	10/7/2009
	 Variable 7,000,000 GBP EMTN
	  	16/7/2009
	 Variable 20,000,000 EUR EMTN
	  	13/10/2009
	 6.625% 200,000,000 euro-sterling bond
	  	14/1/2010
	 Variable rate 650,000,000 Australian Dollar bond
	  	18/7/2011
	 8.375% 200,000,000 euro-sterling bond
	  	20/2/2017
	 5.9% 300,000,000 GBP EMTN
	  	22/2/2021
	 6.75% 250,000,000 euro-sterling bond
	  	29/5/2023
	 Retail Price Index Linked 175,000,000 GBP bond
	  	13/10/2024
	 6.125% 25,000,000 GBP EMTN
	  	14/4/2028
	 4.6% 10,000,000,000 JPY Note
	  	27/7/2029
	 5.75% 50,000,000 GBP EMTN
	  	9/12/2039
	 6.5% 100,000,000 GBP EMTN
	  	31/5/2041
	 *Variable 35,000,000 USD European Investment Bank loan
	  	16/9/2008
	 *4.95% 30,000,000 GBP European Investment Bank loan
	  	3/2/2009
	 *Variable 50,000,000 GBP European Investment Bank loan
	  	15/3/2010
	 *6.28% 48,000,000 GBP European Investment Bank loan
	  	24/3/2010
	 *5.75% 50,000,000 GBP European Investment Bank loan
	  	1/2/2011
	 Variable 1,100,000 GBP Loan Notes
	  	31/3/2006

	*	Guaranteed by Scottish Power plc 

  

					
		 	68	 	22 December 2005

 SCHEDULE 9 
 FORM OF CONFIDENTIALITY UNDERTAKING 
  

	To:	[Potential Bank] 

  

	Re:	£500,000,000 credit agreement dated [·] 2005
between (amongst others) Scottish Power PLC (as Borrower) and the Royal Bank of Scotland Plc (as Agent) (the Agreement) 

 Dear Sirs 
 We understand that you are considering participating in the Facilities. In consideration of us agreeing to make
available to you certain information, by your signature of a copy of this letter you agree as follows: 
  

	1.	CONFIDENTIALITY UNDERTAKING 

 You undertake:

  

	 	(a)	to keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below and to ensure that the Confidential Information is
protected with security measures and a degree of care that would apply to your own confidential information; 

  

	 	(b)	to keep confidential and not disclose to anyone the fact that the Confidential Information has been made available or that discussions or negotiations are taking place or have taken
place between us in connection with the Facilities; 

  

	 	(c)	to use the Confidential Information only for the Permitted Purpose; 

  

	 	(d)	to use all reasonable endeavours to ensure that any person to whom you pass any Confidential Information (unless disclosed under paragraph 2(b) below) acknowledges and complies with
the provisions of this letter as if that person were also a party to it; and 

  

	 	(e)	not to make enquiries of any member of the Group or any of their officers, directors, employees or professional advisers relating directly or indirectly to the Facilities.

  

	2.	PERMITTED DISCLOSURE 

 We agree that you may
disclose Confidential Information: 
  

	 	(a)	to members of the Participant Group and their officers, directors, employees and professional advisers to the extent necessary for the Permitted Purpose and to any auditors of
members of the Participant Group; 

  

	 	(b)	(i) where requested or required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body, (ii) where required by the
rules of any stock exchange on which the shares or other securities of any member of the Participant Group are listed or (iii) where required by the laws or regulations of any country with jurisdiction over the affairs of any member of the
Participant Group; or 

  

	 	(c)	with the prior written consent of us and the Borrower. 

  

					
		 	69	 	22 December 2005

	3.	NOTIFICATION OF REQUIRED OR UNAUTHORISED DISCLOSURE 

 You agree (to the extent permitted by law) to inform us of the full circumstances of any disclosure under paragraph 2(b) or upon becoming aware that Confidential Information has been disclosed in breach of this letter. 
  

	4.	RETURN OF COPIES 

 If we so request in writing, you
shall return all Confidential Information supplied to you by us and destroy or permanently erase all copies of Confidential Information made by you and use all reasonable endeavours to ensure that anyone to whom you have supplied any Confidential
Information destroys or permanently erases such Confidential Information and any copies made by them, in each case save to the extent that you or the recipients are required to retain any such Confidential Information by any applicable law, rule or
regulation or by any competent judicial, governmental, supervisory or regulatory body or in accordance with internal policy, or where the Confidential Information has been disclosed under paragraph 2(b) above. 
  

	5.	CONTINUING OBLIGATIONS 

 The obligations in this
letter are continuing and, in particular, shall survive the termination of any discussions or negotiations between you and us. Notwithstanding the previous sentence, the obligations in this letter shall cease (a) if you become a party to or
otherwise acquire (by assignment or sub participation) an interest, direct or indirect in the Facilities or (b) twelve months after you have returned all Confidential Information supplied to you by us and destroyed or permanently erased all
copies of Confidential Information made by you (other than any such Confidential Information or copies which have been disclosed under paragraph 2 above (other than subparagraph 2(a)) or which, pursuant to paragraph 4 above, are not required to
be returned or destroyed). 
  

	6.	NO REPRESENTATION; CONSEQUENCES OF BREACH, ETC. 

 You acknowledge and agree that: 
  

	 	(a)	neither we nor any of our officers, employees or advisers (each a Relevant Person) (i) make any representation or warranty, express or implied, as to, or assume any
responsibility for, the accuracy, reliability or completeness of any of the Confidential Information or any other information supplied by us or any member of the Group or the assumptions on which it is based or (ii) shall be under any
obligation to update or correct any inaccuracy in the Confidential Information or any other information supplied by us or any member of the Group or be otherwise liable to you or any other person in respect to the Confidential Information or any
such information; and 

  

	 	(b)	we or members of the Group may be irreparably harmed by the breach of the terms of this letter and damages may not be an adequate remedy; each Relevant Person or member of the Group
may be granted an injunction or specific performance for any threatened or actual breach of the provisions of this letter by you. 

  

	7.	NO WAIVER; AMENDMENTS, ETC 

 This letter sets out
the full extent of your obligations of confidentiality owed to us in relation to the information the subject of this letter. No failure or delay in exercising any right, power or privilege under this letter will operate as a waiver thereof nor will
any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privileges under this letter. The terms of this letter and your obligations under this letter may only
be amended or modified by written agreement between us. 
  

					
		 	70	 	22 December 2005

	8.	INSIDE INFORMATION 

 You acknowledge that some or
all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing and you undertake not to use any Confidential
Information for any unlawful purpose. 
  

	9.	NATURE OF UNDERTAKINGS 

 The undertakings given by
you under this letter are given to us and (without implying any fiduciary obligations on our part) are also given for the benefit of the Borrower and each other member of the Group. 
  

	10.	THIRD PARTY RIGHTS 

  

	(a)	Subject to paragraph 6 and paragraph 9 the terms of this letter may be enforced and relied upon only by you and us and the operation of the Contracts (Rights of Third Parties) Act
1999 is excluded. 

  

	(b)	Notwithstanding any provisions of this letter, the parties to this letter do not require the consent of any Relevant Person or any member of the Group to rescind or vary this letter
at any time. 

  

	11.	GOVERNING LAW AND JURISDICTION 

 This letter
(including the agreement constituted by your acknowledgement of its terms) shall be governed by and construed in accordance with the laws of England and the parties submit to the non-exclusive jurisdiction of the English courts. 
  

	12.	DEFINITIONS 

 In this letter (including the
acknowledgement set out below): 
 Confidential Information means any information relating to the Borrower, the Group, and the
Facilities, including, without limitation, the information memorandum (if applicable), provided to you by us or any of our affiliates or advisers, in whatever form, and includes information given orally and any document, electronic file or any other
way of representing or recording information which contains or is derived or copied from such information but excludes information that (a) is or becomes public knowledge other than as a direct or indirect result of any breach of this letter or
(b) is known by you before the date the information is disclosed to you by us or any of our affiliates or advisers or is lawfully obtained by you after that date, other than from a source which is connected with the Group and which, in either
case, as far as you are aware, has not been obtained in violation of, and is not otherwise subject to, any obligation of confidentiality; 
 Facilities means the facilities made available to the Borrower under the Agreement. 
 Group means the Borrower and
each of its holding companies and subsidiaries and each subsidiary of each of its holding companies (as each such term is defined in the Companies Act 1985); 
 Participant Group means you, each of your holding companies and subsidiaries and each subsidiary of each of your holding companies (as each such term is defined in the Companies Act 1985); and 
  

					
		 	71	 	22 December 2005

 Permitted Purpose means considering and evaluating whether to enter into the Facilities.

 Please acknowledge your agreement to the above by signing and returning the enclosed copy. 
 Yours faithfully 
  

	
	  
  

	 For and on behalf of

	 [Lender]

  

			
	To:	  	[Lender]
		  	The Borrower and each other member of the Group

 We acknowledge and agree to the above: 
  

	
	  
  

	 For and on behalf of

	 [Potential Bank]

  

					
		 	72	 	22 December 2005

 SIGNATORIES 
 SIGNATORIES TO THE FACILITY AGREEMENT 
  

					
	 Company

		
	 SCOTTISH POWER PLC
	  	
			
	 By:
	  	ADRIAN COATS	  	
		
	 Mandated Lead Arrangers
	  	
		
	 THE BANK OF TOKYO-MITSUBISHI, LTD
	  	
			
	 By:
	  	DAVID DALLISON	  	
		
	 BNP PARIBAS
	  	
			
	 By:
	  	MARK PEGRUM	  	 SIMON ALLOCCA

		
	 THE ROYAL BANK OF SCOTLAND PLC
	  	
			
	 By:
	  	SEAN MALONE	  	
		
	 Agent
	  	
		
	 THE ROYAL BANK OF SCOTLAND PLC
	  	
			
	 By:
	  	PHILIP PENTNEY	  	
		
	 Original Banks
	  	
		
	 THE ROYAL BANK OF SCOTLAND PLC
	  	
			
	 By:
	  	SEAN MALONE	  	

  

					
		 	73	 	22 December 2005

					
	THE BANK OF TOKYO-MITSUBISHI, LTD.
			
	By:	  	DAVID DALLISON	    	
	
	BNP PARIBAS
			
	By:	  	MARK PEGRUM	    	SIMON ALLOCA
	
	BARCLAYS BANK PLC
			
	By:	  	CLIFF BAYLIS	    	
	
	COMMERZBANK AKTIENGESELLSCHAFT, LONDON BRANCH
			
	By:	  	JONATHAN BOURNE	    	MICHAEL MURNANE
	
	DEUTSCHE BANK AG, LONDON BRANCH
			
	By:	  	RICHARD SEDLACEK	    	MICHAEL STARMER-SMITH
	
	HSBC BANK PLC
			
	By:	  	DAVID PHILLIPS	    	
	
	ING BANK N.V., LONDON BRANCH
			
	By:	  	ANJILA THOMAS	    	LINDSAY CORNELISSEN
	
	JPMORGAN CHASE BANK, N.A.
			
	By:	  	NICHOLAS LAW	    	
	
	MORGAN STANLEY BANK
			
	By:	  	KEVIN ADESON	    	

  

					
		 	74	 	22 December 2005

					
	TD BANK EUROPE LIMITED
			
	By:	 	PHILIP BATES	    	
	
	UBS AG, LONDON BRANCH
			
	By:	 	ALAN GREENHOW	    	JUDITH CAMPBELL

  

					
		 	75	 	22 December 2005

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