Electricity Citation and commencement 1 This Order may be cited as the Energy Act 2004 (Assistance for Areas with High Distribution Costs) (Amendment) Order 2020 and comes into force on 5th March 2020. Amendment of the Energy Act 2004 (Assistance for Areas with High Distribution Costs) Order 2005 2 The Energy Act 2004 (Assistance for Areas with High Distribution Costs) Order 2005 is amended in accordance with articles 3 to 7. Insertion of article 5A (amount of Shetland assistance amount) 3 After article 5 insert— Amount of Shetland assistance amount 5A The Shetland assistance amount required to be paid by authorised transmitters to relevant distributors under the scheme, in respect of the year commencing on 1st April 2021, is £27,000,000 (twenty seven million pounds). . Omission of articles 6 and 7 (modifications to licences granted to authorised suppliers and authorised distributors) 4 Omit article 6 (modifications to licences granted to authorised suppliers) and article 7 (modifications to licences granted to authorised distributors) . Insertion of articles 9 to 11 (amendment of the scheme) 5 After article 8 insert— Amendment of the scheme 9 The scheme is amended in relation to the year commencing on 1st April 2021 and subsequent years in accordance with the modifications to the conditions of licences described in articles 10 and 11. Modifications to licences granted to authorised suppliers 10 1 The standard conditions of licences granted or treated as granted to authorised suppliers under section 6(1) of the Electricity Act 1989 are modified as set out in Schedule 10. 2 The conditions which by virtue of section 33 of the Utilities Act 2000 are the standard conditions for the purposes of licences granted to authorised suppliers after the date on which the Energy Act 2004 (Assistance for Areas with High Distribution Costs) (Amendment) Order 2020 comes into force are modified as set out in Schedule 10. Modifications to licences granted to authorised transmitters 11 1 The standard conditions of licences granted or treated as granted to authorised transmitters under section 6(1) of the Electricity Act 1989 are modified as set out in Schedules 11 to 13. 2 The conditions which by virtue of section 33 of the Utilities Act 2000 are the standard conditions for the purposes of licences granted to authorised transmitters after the date on which the Energy Act 2004 (Assistance for Areas with High Distribution Costs) (Amendment) Order 2020 comes into force are modified as set out in Schedules 11 to 13. . Omission of Schedules 2, 3, 4 and 5 (modifications to licences granted to authorised suppliers and authorised distributors) 6 Omit Schedule 2 (modifications to licences granted to authorised suppliers) and Schedules 3, 4 and 5 (modifications to licences granted to authorised distributors) . Insertion of Schedules 10 to 13 (modifications to licences granted to authorised suppliers and authorised transmitters) 7 After Schedule 9 insert— SCHEDULE 10 Modifications to licences granted to authorised suppliers: modification of condition 15 Article 10 1 Condition 15 (assistance for areas with high distribution costs scheme: payments to System Operator) is modified as follows. 2 In paragraph 15.3(a) (licensee’s duty to pay), after “the pence per kWh tariff” insert “, and from the Shetland pence per kWh tariff,”. 3 In paragraph 15.9 (definitions for condition)— a after the definition of “Relevant Distributor” insert— Shetland pence per kWh tariff means the tariff calculated in accordance with paragraph 2A of standard condition C21 of the Transmission Licence. , b after the definition of “System Operator” insert— the pence per kWh tariff means the tariff calculated in accordance with paragraph 2 of standard condition C21 of the Transmission Licence. . SCHEDULE 11 Modifications to licences granted to authorised transmitters: modification to condition C20 Article 11 1 Condition C20 (assistance for areas with high distribution costs scheme: restriction on revenue) is modified as follows. 2 For paragraph 1 substitute— 1 The licensee shall use its best endeavours to ensure that: a in each relevant year beginning before 1 April 2021, the revenue derived by the licensee from the assistance for areas with high distribution costs scheme activity shall not exceed the assistance for areas with high distribution costs scheme amount for that relevant year as calculated in accordance with the following formula: b in each relevant year beginning on or after 1 April 2021, the revenue derived by the licensee from the assistance for areas with high distribution costs scheme activity shall not exceed the assistance for areas with high distribution costs scheme amount for that relevant year as calculated in accordance with the following formula: where HBM t represents the assistance for areas with high distribution costs scheme amount in relation to the relevant year t. A t represents the assistance amount in relation to the relevant year t. SA t represents the Shetland assistance amount in relation to the relevant year t. HBOC t represents the administration allowance in relation to the relevant year t. HBK t represents the correction amount in relation to the relevant year t. . 3 After paragraph 2 insert— 2A For the purposes of paragraph 1 above, for the relevant year of the assistance for areas with high distribution costs scheme beginning on 1 April 2021, the Shetland assistance amount shall have the value specified in the Energy Act 2004 (Assistance for Areas with High Distribution Costs) Order 2005, and for each subsequent relevant year the Shetland assistance amount shall be derived from the following formula: where SA t-1 represents the Shetland assistance amount in relation to the relevant year t-1. RPI t has the meaning given in paragraph 2. . 4 In paragraph 5— a in the definition of “assistance amount”, after “made pursuant to” insert “paragraph 1 of”, b after the definition of “relevant year” insert— “Shetland assistance amount” means the amount payable by the licensee to a relevant distributor in any relevant year beginning on or after 1 April 2021 made pursuant to paragraph 1A of standard condition C22 (Assistance for areas with high distribution costs scheme: payments to a relevant distributor) and with the value specified in or calculated in accordance with paragraph 2A above. . SCHEDULE 12 Modifications to licences granted to authorised transmitters: modification to condition C21 Article 11 1 Condition C21 (assistance for areas with high distribution costs scheme: payments from authorised suppliers) is modified as follows. 2 After paragraph 2 insert— 2A For each relevant year beginning on or after 1 April 2021, the licensee shall calculate a Shetland p/kWh tariff by dividing the total Shetland assistance amount by a reasonable forecast of the total units of electricity to be supplied within Great Britain during the relevant year. . 3 After paragraph 3 insert— 3A For each relevant year beginning on or after 1 April 2021, each invoice issued to an authorised supplier pursuant to paragraph 3 must also include a separate amount determined by applying the Shetland p/kWh tariff determined in accordance with paragraph 2A to the units of electricity actually supplied by that authorised supplier during each period in relation to the relevant year t specified in the table in paragraph 3. . 4 After paragraph 5 insert— 5A For each relevant year beginning on or after 1 April 2021, the statement made pursuant to paragraph 5 shall also set out: a the methodology used to calculate the Shetland p/kWh tariff; b the Shetland p/kWh tariff that will apply in the relevant year; c a statement of the Shetland assistance amount payable by the licensee in relation to the relevant year, together with details of the payments payable by the licensee on the payment dates in relation to the relevant year specified in standard condition C22. . 5 In paragraph 9— a in the definition of “assistance amount” after “pursuant to” insert “paragraph 1 of”, b after the definition of “relevant year” insert— “Shetland assistance amount” means the amount payable by the licensee to a relevant distributor in any relevant year beginning on or after 1 April 2021 made pursuant to paragraph 1A of standard condition C22 (Assistance for areas with high distribution costs scheme: payments to a relevant distributor). “Shetland p/kWh tariff” means the tariff calculated in accordance with paragraph 2A. . SCHEDULE 13 Modifications to licences granted to authorised transmitters: modification to condition C22 Article 11 1 Condition C22 (assistance for areas with high distribution costs scheme: payments to a relevant distributor) is modified as follows. 2 After paragraph 1 insert— 1A In respect of each relevant year beginning on or after 1 April 2021, the licensee shall pay to a relevant distributor the Shetland assistance amount in the proportions specified and on the payment dates specified in the table in paragraph 1. . 3 In paragraph 2, at the end insert— “Shetland assistance amount” means the amount paid by the licensee to a relevant distributor in relation to any relevant year beginning on or after 1 April 2021 made pursuant to this condition as specified in or calculated in accordance with paragraph 2A of standard condition C20. . . Kwasi Kwarteng Minister of State for Energy and Clean Growth Department for Business, Energy and Industrial Strategy 11th February 2020