Domestic Gas and Electricity (Tariff Cap) Act 2018

JurisdictionUK Non-devolved
Citation2018 c. 21
(1) As soon as practicable after this Act is passed, the Gas and Electricity Markets Authority (“the Authority”) must modify the standard supply licence conditions so that they include conditions (“tariff cap conditions”) that impose a cap on all standard variable and default rates that may be charged by the holders of supply licences for the supply of gas or electricity under domestic supply contracts.But this is subject to section 3 (exemptions from the cap) .may modify the tariff cap conditions from time to time, butmust secure that such conditions continue to be included in the standard supply licence conditions until they cease to have effect by virtue of section 8.(3) The “standard supply licence conditions” are the standard conditions incorporated in supply licences by virtue of section 8 of the Gas Act 1986 or section 8A of the Electricity Act 1989.standard variable rate” means a rate or amount charged for, or in relation to, the supply of gas or electricity under the contract that is not fixed for a period specified in the contract, anddefault rate” means a rate or amount charged for, or in relation to, the supply of gas or electricity under the contract that applies if the customer under the contract fails to choose an alternative rate.(5) Modifications made by the Authority under this section may include consequential, incidental, supplemental and transitional modifications of the standard supply licence conditions.the need to create incentives for holders of supply licences to improve their efficiency;the need to set the cap at a level that enables holders of supply licences to compete effectively for domestic supply contracts;the need to maintain incentives for domestic customers to switch to different domestic supply contracts;the need to ensure that holders of supply licences who operate efficiently are able to finance activities authorised by the licence.forms part of that rate, butis not paid on a regular basis by the majority of customers who pay that rate.have effect in relation to supply licences, whenever granted, and domestic supply contracts, whenever entered into;must set out how the cap is to be calculated, and may make provision about assumptions required to be made in making the calculation;may make provision specifying how a standard variable or default rate is to be identified;may make provision requiring information to be provided by holders of supply licences to the Authority for the purposes of exercising functions relating to tariff cap conditions;may confer functions on the Authority;may make different provision for different areas or different cases;may do any of the things authorised for supply licences by section 7B(5) (a) , (6) or (7) of the Gas Act 1986 or section 7(3) , (4) , (5) or (6A) of the Electricity Act 1989.exempt holders of supply licences from their application, ormake different provision for different holders of supply licences.(3) Before making the first modifications under section 1 the Authority must, and before making any subsequent modifications under that section the Authority may, consult such persons as it considers appropriate on the methodology to be used for the purposes of the cap.(4) Consultation undertaken before this Act is passed is as effective for the purposes of subsection (3) as consultation undertaken after it is passed.benefit from the cap on rates or amounts charged for, or in relation to, the supply of gas or electricity provided for by the Energy Market Investigation (Prepayment Charge Restriction) Order 2016, made by the Competition and Markets Authority, orbenefit from a cap on such rates or amounts that is a replacement for the cap provided for by that Order.domestic customers who benefit from a cap imposed by the Authority on rates or amounts charged for, or in relation to, the supply of gas or electricity to customers who appear to the Authority to be vulnerable by reason of their financial or other circumstances;standard variable rates which apply only if chosen by domestic customers if, or to the extent that, the rates in question appear to the Authority to support the production of gas, or the generation of electricity, from renewable sources.(3) The Authority must consult such persons as it considers appropriate about whether and, if so, how to exercise the power conferred by subsection (2) (b) .(4) The Authority may carry out the consultation either before, or in the course of, taking the steps described in section 4 in relation to proposed modifications which consist of or include provision to be made in the exercise of the power conferred by subsection (2) (b) .when making the first modifications under section 1, orif that is not practicable, as soon as practicable after it has made the first modifications under that section.(6) Consultation undertaken before this Act is passed is as effective for the purposes of subsection (3) as consultation undertaken after it is passed.(1) Before making any modifications under section 1, the Authority must take the following steps.stating that it proposes to make the modifications,setting out the proposed modifications and their effect, andspecifying the period within which representations with respect to the proposed modifications may be made.(3) That period must be a period of not less than 28 days beginning with the day on which the notice is published.each holder of a supply licence,the Secretary of State,Citizens Advice, andF1Consumer Scotland.(5) The Authority must consider any representations which are made before the end of the period specified in the notice.(6) Steps taken before this Act is passed are as effective for the purposes of this section as steps taken after it is passed.(1) This section applies if, after taking the steps described in section 4, the Authority decides to make the modifications.publish the modifications in such manner as it considers appropriate

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